Small Business Administration Final Rule Makes Significant Changes to Recertification Regulations and Various Government Contracting Programs

On December 17, 2024, Small Business Administration (SBA) published a final rule making significant changes to SBA’s recertification regime and numerous other SBA programs. The recertification rule changes will affect a business’s eligibility to win both new contracts and work under existing contracts following a recertification of its size or of its small business program status. The changes could dramatically affect both small businesses and large businesses considering merger and acquisition (M&A) activity. This Alert addresses these recertification changes. Given the breadth of SBA’s final rule, we will issue separate alerts addressing other aspects of the final rule.

Key Areas to Consider Under the Updated Antitrust Division Corporate Compliance Guidelines

For the first time since its introduction in 2019, the U.S. Department of Justice Antitrust Division (“DOJ”) has updated its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (the “Antitrust Compliance Guidelines” or “Guidelines”). The Antitrust Compliance Guidelines assist prosecutors in evaluating the effectiveness of corporate compliance programs aimed at preventing and detecting violations of the Sherman Act. These guidelines serve a critical role in prosecutorial decisions, shaping the DOJ’s approach on whether to bring antitrust charges, structuring resolutions and determining sentencing guidelines recommendations. For this reason, it is important for corporations to design their antitrust compliance programs with the Antitrust Compliance Guidelines in mind.

How Broad Is Too Broad? Supreme Court Considers Scope of NEPA

In the first major National Environmental Policy Act (NEPA) case to reach the U.S. Supreme Court in two decades, the Court is poised to address a circuit split over whether an agency doing an environmental review under NEPA must consider effects beyond its regulatory jurisdiction, including effects relating to climate change. On December 10, 2024, the U.S. Supreme Court heard oral argument in Seven County Infrastructure Coalition v. Eagle County, which will clarify the scope of NEPA’s requirement to evaluate “reasonably foreseeable” effects. At issue is the U.S. Court of Appeals for the D.C. Circuit’s vacatur of an environmental impact statement (EIS) prepared by the Surface Transportation Board (the Board) on the proposed construction of an 88-mile railroad, citing insufficient analysis of potential adverse upstream and downstream effects.

From “Energy Transition” to “Energy Security”: Assessing the Impact of the Republican Trifecta on the Energy Industry

Energy policy under President-elect Trump and Republicans, who will control both the Senate and House of Representatives at the start of the next Congress in January, will shift focus from the energy transition agenda of the Biden Administration to energy security, with a primary focus on lowering domestic energy costs.

Virginia Supreme Court Strengthens Protection Against Computer Crimes

Criminal cases are not typically on the radar screen for legal and cybersecurity personnel. But a November 21, 2024, decision from the Supreme Court of Virginia, Commonwealth v. Wallace, has potential ramifications for protection of confidential information and trade secrets.

A General Counsel’s Guide to the New HSR Rules

In November 2024, the Federal Trade Commission (FTC) formally published its long-awaited final rule transforming the premerger notification process under the Hart-Scott-Rodino (HSR) Act—including changes to the HSR notification forms, accompanying instructions, and related agency rules. Compared with the FTC’s initial proposal in 2023, the unanimously adopted final rule is narrower and less burdensome (with changes likely made to secure the support of the Republican-appointed commissioners) but will still impose significant additional compliance costs on HSR filers.

Trump 2.0: White House and Congressional Republicans Poised to Use the Congressional Review Act for Swift Regulatory Rollback

Among other hallmarks of the incoming second Trump Administration, promises to slash regulations and the federal bureaucracy are now a defining feature. As exemplified by the creation of the “Department of Government Efficiency” or “DOGE,” an autonomous organization to be spearheaded by Elon Musk and Vivek Ramaswamy and tasked with “cut[ting] the federal government down to size,” President-elect Trump is expected to kick off his de-regulatory agenda on day one.

Bankruptcy Court Ruling Highlights Important Circuit Split on Assuming Franchise Agreements

In a recent decision, the U.S. Bankruptcy Court for the Eastern District of California, applying Ninth Circuit precedent, ruled that a debtor/franchisee cannot assume its franchise agreements in a chapter 11 bankruptcy case without the franchisor's consent, even where the debtor merely intends to continue to perform under the agreement rather than assign it to a third party. This ruling in In re Pinnacle Foods of California LLC, No. 24-11015-B-11, 2024 WL 4481070, (Bankr. E.D. Cal. Oct. 10, 2024) highlights a persistent and contentious issue in bankruptcy law: the intersection of intellectual property rights and the Bankruptcy Code's provisions for assuming executory contracts.

When It Counts: Fully Secured and Paid-Off Creditors Can Count as Petitioning Creditors for Involuntary Bankruptcy Petitions

On October 29, 2024, the Ninth Circuit Bankruptcy Appellate Panel (BAP) issued two opinions addressing important rules for involuntary petitions. (A BAP is comprised of three bankruptcy judges and exists in certain circuits to serve as an alternative to the U.S. District Court as an intermediate appellate court between the bankruptcy court and the U.S. Court of Appeals.) First, in determining whether a viable involuntary petition requires three petitioning creditors because the alleged debtor has 12 or more creditors, fully secured creditors with nonrecourse claims are counted under Section 303(b)(1). Second, if a creditor has a claim on the filing date, that creditor qualifies as a petitioning creditor, under both (b)(1) and (b)(2), if the claim is later paid off. In this alert, we examine the BAP’s opinions and the implications on creditors. In re King, No. 9:22-BK-10674-RC, 2024 WL 4599982 (B.A.P. 9th Cir. Oct. 29, 2024), In re King, No. 9:22-BK-10673-RC, 2024 WL 4600043 (B.A.P. 9th Cir. Oct. 29, 2024).

Trump 2.0: Anticipated Impact on Aviation and Aerospace

Under the second Trump Administration, we are poised to see significant changes in the air transportation and aerospace landscape. President-elect Trump has made clear his intention to reduce regulation at the federal level, and air transportation will certainly be no exception. In particular, we expect to see reductions in consumer protection initiatives pursued by the Biden Administration, as well as significant reductions in restrictions on the commercial space and advanced air mobility sectors.

Trump 2.0: What Happens to Federal Funding?

Pillsbury’s recent alert on the newly formed Department of Government Efficiency, or “DOGE,” an autonomous organization created by President-elect Trump and spearheaded by Elon Musk, identified several steps for industries bracing for the impacts of DOGE’s anticipated recommendations to slash the federal budget. We now examine the implications of the Trump Administration’s policy priorities and cost-cutting focus on federal appropriations, government contracts and grant awards.

Corporate Transparency Act Enjoined

On December 3, 2024, the U.S. District Court for the Eastern District of Texas (Mazzant, J.) granted a preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al., No. 4:24-CV-478 (E.D. Tex. filed Dec. 3, 2024) (the “Order”) enjoining enforcement of the Corporate Transparency Act, 31 U.S.C. § 5336 (CTA) and the Reporting Rule, 31 C.F.R. 1010.380. The court also stayed the January 1, 2025 compliance deadline for reporting companies—as defined by 31 U.S.C. § 5336(b)—to file beneficial ownership information reports under § 5336(b)(2). Order at 78-79. The scope of the injunction is nationwide. Id. at 2, 77-78.

Treasury Department and IRS Issue Final Regulations on the Advanced Manufacturing Production Credit Under Section 45X of the Internal Revenue Code

As amended by the Inflation Reduction Act of 2022, section 45X of the Internal Revenue Code (IRC) grants an advanced manufacturing production credit (AMPC) to manufacturers who produce certain clean energy components in the United States. The APMC is available for eligible components produced and sold after December 31, 2022. Eligible components include solar and wind components, inverters, some battery components and applicable critical minerals. In addition to being produced in the United States, the components must be sold to an unrelated party in the course of the taxpayer’s trade or business. The credit amounts available under IRC section 45X vary based on the type of eligible component that is produced and sold by the taxpayer.

No Longer Appealing: Why Are Contractors Filing Fewer Appeals at the ASBCA?

The Armed Services Board of Contract Appeals (ASBCA or Board) recently issued its fiscal year (FY) 2024 annual report, covering the period from October 1, 2023, through September 30, 2024. As we have highlighted in the past several years, the Board continues to see fewer docketed appeals year over year. For FY 2024, the Board docketed 276 appeals, which represents a 20% decrease from the number of appeals docketed in FY 2023 and the lowest number of new appeals docketed during any fiscal year since 1979. Apart from a modest increase in FY 2020—which was an anomalous year for several reasons—contractors have docketed fewer appeals at the Board every year since 2014.

Trump 2.0: A First Look at the Department of Government Efficiency

Since the election, President-elect Trump has announced a flurry of initiatives for his next term in the White House, along with nominations of the government officials tapped to drive his agenda. As part of these announcements, Trump selected Elon Musk and Vivek Ramaswamy to lead a new entity dubbed “the Department of Government Efficiency,” or “DOGE,” tasked with “making changes to the federal bureaucracy” to “slash excess regulations, cut wasteful expenditures, and restructure federal agencies.”

Critical Information and Communications Technology Service Providers Under DORA

For financial entities, a vital part of the preparations for DORA includes compiling registers of information relating to contractual arrangements with providers of ICT services (ICT Providers). The purpose of the registers of information is not only to assist with financial entities’ internal ICT risk management (and to ensure that regulators can appropriately supervise financial entities) but also to enable the European Supervisory Authorities (ESAs) to designate “critical” ICT Providers and establish and conduct oversight of such ICT Providers.

Government Accountability Office Fiscal Year 2024 Bid Protest Statistics Return to Normal

On November 14, 2024, the Government Accountability Office (GAO) published its Bid Protest Annual Report to Congress for Fiscal Year 2024. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for FY 2024 bid protest activity. The report also includes a chart providing similar bid protest statistics for fiscal years 2020 to 2024. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

Trump 2.0 Administration: Anticipated Impacts on International Trade, Sanctions and Economic Policy

With the return of Donald Trump to the U.S. presidency, international trade and sanctions policies are poised for significant changes. Drawing from President-elect Trump’s first term and current campaign promises, industries should prepare for potential upheaval in global trade relations, tariff regimes, and economic enforcement policies. The following is the first in a series of alerts outlining important elements of the incoming Administration’s approaches to international trade law.

DC Circuit Rules White House CEQ Lacks Authority to Issue Binding NEPA Regulations

On November 11, 2024, in Marin Audubon Society v. Federal Aviation Administration, a divided panel of the U.S. Court of Appeals for the District of Columbia Circuit held that the White House Council on Environmental Quality (CEQ) lacks statutory authority to issue regulations implementing the National Environmental Policy Act (NEPA) that are binding upon federal agencies. The Court held that the CEQ regulations, which purport to govern how all federal agencies must implement NEPA, are beyond the scope of legal authority granted to CEQ by Congress.

FERC Rejects Interconnection Proposal for Nuclear-Powered Data Center Project

On November 1, 2024, the Federal Energy Regulatory Commission (FERC) issued an order rejecting PJM Interconnection’s amended interconnection services agreement (“amended ISA”) with Talen Energy subsidiary Susquehanna Nuclear LLC and PPL Electric Utilities Corporation. The amended ISA would have increased the amount of load sent from the Susquehanna nuclear plant to a co-located Amazon Web Services (AWS) data center from 300MW to 480MW. Co-located loads are defined as customer loads that share a physical site with generating units and can be directly served by those units rather than through the broader transmission system.

The Treasury Department Finalizes U.S. Outbound Investment Rules

On October 28, 2024, the U.S. Department of Treasury issued the long-awaited Final Rule implementing its outbound investment review framework. This follows prior stages of rulemaking, including an Advance Notice of Proposed Rulemaking (ANPRM) in August 2023 and a Notice of Proposed Rulemaking (NPRM) in June 2024, and formalizes a new governmental system to monitor and, when necessary, restrict investments in China that may be viewed as a national security risk.

China Issues New Export Control Regulations on Civil-Military Dual-Use Items

On October 19, 2024, the State Council of the People’s Republic of China (China or PRC) promulgated the Regulations on the Export Control of Dual-Use Items of China (Export Control Regulations), which will become effective on December 1, 2024.

Trump 2.0

Former President Donald J. Trump won the U.S. presidential election on November 5, prevailing in the key “battleground states” necessary to win the Electoral College.

Biden Administration Announces Research and Development Program to Accelerate Semiconductor Advanced Packaging

On October 18, the Biden Administration released a $1.6 billion Notice of Funding Opportunity (NOFO) funded by the CHIPS and Science Act to accelerate U.S. Semiconductor Advanced Research and Development (R&D) across five key R&D areas. Aligning with the Administration’s goal of investing in domestic manufacturing industries, the program is projected to provide $1.6 billion in funding across the five R&D areas.

Navigating the EU’s “NIS 2” Directive: Key Cybersecurity Compliance Points for Businesses Operating in the EU to Consider

As cybersecurity threats continue to evolve, the European Union has advanced its regulatory framework with the introduction of a new cyber law, Directive 2022/2555, commonly referred to as “NIS 2”. It replaces Directive 2016/1148 (NIS 1), aiming to address the fragmented cybersecurity landscape across the EU by creating a unified approach to risk management and response. While NIS 1 focused on essential sectors, such as energy and transport, NIS 2 expands its reach to a broader range of industries, reflecting the digitalization of the European economy and the increasing risks associated with cyber threats across sectors.

Small Business Administration Expands the “Rule of Two”

On October 25, 2024, the Small Business Administration (SBA) issued a proposed rule that would expand the applicability of the “Rule of Two.” Under the proposed rule, the Rule of Two would apply to orders issued under multiple award contracts, with certain exceptions.

New York Department of Financial Services’ New Enhanced Cybersecurity Requirements Effective November 1, 2024

On November 1, 2024, the next phase of several significant amendments to the New York Department of Financial Services’ (NYDFS) cybersecurity regulation take effect. These specific amendments, enacted in 2023, impact the scope of entities covered by the regulation and require covered entities to implement enhanced governance, business continuity and encryption standards.

Hurricanes Helene and Milton: Evaluating Business Interruption Claims Following a Large-Scale Disaster

Hurricanes Helene and Milton physically damaged large areas of the South, particularly in Florida, North and South Carolina, Georgia and Virginia. Businesses in the region are also certainly suffering long-lasting economic damage as they remain closed—and they will rightly want to secure business interruption coverage for those losses.

U.S. Department of Energy Announces $900 Million Funding Opportunity for Generation III+ Small Modular Reactors

On October 16, 2024, the U.S. Department of Energy (DOE) issued a $900 million funding initiative to support the deployment of Generation III+ Small Modular Reactors (Gen III+ SMRs). The application deadline is January 17, 2025, and entities well-positioned to collaborate with utilities and nuclear technology providers to demonstrate a clear path to deployment should consider this opportunity.

U.S. Bankruptcy Court Holds that State-Court Receivership Order Does Not Bar Managing Member from Seeking LLC Bankruptcy Relief

When disputes involving financially distressed real estate or other property cannot readily be resolved through foreclosure, deed-in-lieu, consensual out-of-court restructuring, or a cooperative bankruptcy filing, a lender/mortgagee (or other creditors or interest holders) can ask a court to appoint a receiver to take control of the property, its rents, and sometimes the borrower entity. Typical receivership orders often grant receivers broad authority to take actions with respect to property and receivership assets. The orders also typically grant broad injunctive relief barring creditors, managers, equity holders and others, from taking actions against the property.

The Department of Defense Issues Final Rule Establishing CMMC 2.0

On October 15, 2024, the Department of Defense (DoD) published a long-awaited final rule implementing the Cybersecurity Maturity Model Certification (CMMC) program 2.0. The final rule will take effect on December 16, 2024. Spanning 146 pages in the Federal Register, this rule finalizes DoD’s regulations concerning CMMC 2.0. This rule does not, however, revise the DoD Federal Acquisition Regulation Supplement (DFARS). As we previously reported, in August DoD issued a proposed rule revising the DFARS to implement CMMC 2.0 in solicitations and contracts (the DFARS rule). The comment period for that proposed rule closed on October 15, 2024. Once the DFARS rule is also finalized, the phased roll out of the CMMC program will begin.

From Anatomy to Action: Navigating Data Center Contracts

Our colleagues recently provided a comprehensive overview of the anatomy of a data center, which explored the structural, energy and real estate implications of these essential facilities.

Pentagon Unveils $984 Million Loan Program to Promote Critical Technologies

On September 27, the Department of Defense (DoD) published a Notice of Funding Availability to accelerate the commercialization of technologies critical to U.S. national security and defense. DoD’s Office of Strategic Capital (OSC) will carry out this program in line with its mission to “attract and scale private capital” to critical technologies. The program will provide direct loans ranging from $10 million to $150 million for eligible entities investing in technologies that benefit DoD but are not limited to DoD operations.

The Challenge Organizations Face to Become DORA Compliant Is Not to Be Underestimated

Financial entities within the EU are required to submit registers of information detailing their contractual arrangements with providers of information and communication technology (ICT) services (ICT Providers) to the European Supervisory Authorities (ESAs) prior to DORA’s compliance deadline. Financial entities should now be engaging with their existing ICT Providers to prepare such registers of information to enable the ESAs to designate “critical” ICT Providers (CTPPs).

Lenders Beware: The Ponzi Scheme Presumption Can Trap an Unwitting Lender

The Ponzi scheme presumption applies when a bankruptcy trustee (or similarly situated plaintiff) establishes that a Ponzi scheme exists. As a matter of law, it allows the court to infer the Ponzi scheme perpetrator’s actual intent to hinder, delay or defraud creditors with respect to seemingly all payments made during the existence of the scheme. See, e.g., Johnson v. Neilson (In re Slatkin), 525 F.23 805, 814 (9th Cir. 2008). Even payments received from the perpetrator in good faith can be clawed back, though recipients should be entitled to retain payments applied to their principal or actual investment in the scheme.

District Court Finds Qui Tam Provisions of the False Claims Act Unconstitutional

In a groundbreaking decision issued on September 30, 2024, Judge Kathryn Mizelle of the U.S. District Court for the Middle District of Florida broke with decades of precedent and held that the qui tam provisions of the False Claims Act (FCA) are unconstitutional. See U.S. ex rel. Zafirov v. Florida Medical Assocs., LLC, No. 8:19-CV-01236-KKM-SPF, (M.D. Fla. Sept. 30, 2024).

The Beginning of the End for the USPTO’s After Final Consideration Pilot Program 2.0

On October 1, 2024, the U.S. Patent and Trademark Office (USPTO) announced the termination of the After Final Consideration Pilot Program 2.0 (AFCP 2.0), a program widely used by patent applicants since 2013. As the program enters its final extension period, patent applicants should be aware of key deadlines and explore alternative strategies for responding to final office actions. Initially set to expire on September 30, 2024, the AFCP 2.0 has been extended to December 14, 2024, after which no further participation requests will be accepted. The decision to end the program follows public resistance to a proposed fee structure aimed at offsetting its high administrative costs.

Corporate Transparency Act: Is Your Company Prepared to Meet the Deadline for Filing on January 1, 2025?

The federal Corporate Transparency Act (CTA) became effective on January 1, 2024, and set a deadline of January 1, 2025, for entities existing on the effective date to file an initial report. As we enter the fourth quarter of 2024, that deadline is fast approaching. Many entities have waited to see if the statute would be invalidated, the rules further clarified, or the deadline postponed, or have decided to wait until the deadline is at hand. It now may be time for entities formed or qualified to do business in the United States to determine if they are required to file and, if so, to determine who are the “beneficial owners” whose name and personal information needs to be collected, and to begin to collect this information.

New UK Trade Sanctions Enforcement Body Goes Live October 10, 2024

The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (the Regulations) were published on September 12, 2024, and are effective from October 10, 2024. They grant the Office of Trade Sanctions Implementation (OTSI) new civil enforcement powers in respect of most UK trade sanctions, and the Department for Transport (DfT) corresponding powers in relation to aircraft and shipping sanctions. Businesses operating in the UK should expect substantially heightened trade sanctions enforcement risk, particularly as penalties for breaches of trade sanctions will be imposed on a strict liability basis. Certain parties in the financial, legal, shipping and aviation sectors will also be impacted by new mandatory reporting obligations.

Is the Federal Circuit Breathing Life Back Into False Patent Marking Claims?

On October 3, 2024, the Federal Circuit issued a decision in Crocs, Inc. v. Effervescent, Inc. holding that a cause of action arises under Section 43(a)(1)(B) of the Lanham Act “where a party falsely claims that it possesses a patent on a product feature and advertises that product feature in a manner that causes consumers to be misled about the nature, characteristics, or qualities of its product.”

DOJ Debuts Updates to Its Evaluation of Corporate Compliance Programs Aimed at the Responsible Use of Artificial Intelligence

On September 23, 2024, the U.S. Department of Justice (DOJ) Criminal Division released an updated version of its Evaluation of Corporate Compliance Programs (ECCP) guidance. DOJ first published the ECCP in 2017 to provide clear guidance on which factors federal prosecutors will consider when evaluating the strength of a corporation’s compliance programs in the context of an investigation or enforcement action. The ECCP instructs prosecutors on how to evaluate a company’s risk assessment mechanisms, to ensure that the company’s policies and procedures are responsive to the risks that it has identified and communicate those risks, and the established risk mitigations, to the corporation’s stakeholders, such as employees and vendors. The ECCP is a critical resource that companies should consider when developing compliance programs to avoid penalties associated with DOJ enforcement action.

Federal Court Issues Injunction to Prevent Presumptive Gender and Race Preferences for DOT Contracts Within Kentucky and Indiana

Bipartisan Legislation Presents Opportunity for Passing PFAS Laws

With appropriations settled until December 20, Congress now has one other piece of “must-pass” legislation to address: the National Defense Authorization Act (NDAA). The NDAA authorizes the activities of the Department of Defense (DoD) for the following fiscal year and the legislation has passed on a bipartisan basis for over 60 consecutive years. Because of the nature of the bill and its legacy as a successful, bipartisan movement, the NDAA has become critical for Congress to pass each year. However, the NDAA, as with other must-pass pieces of legislation, has also become a vehicle for attaching policy items that would not otherwise pass on their own, either because they are too controversial or not popular enough. As a result, the passage of the NDAA has become more controversial in the past few years as social programs and partisan priorities have been added to the negotiation process. One area of attention in recent years addresses DoD handling of PFAS chemicals. As the House and Senate versions of the NDAA have differing provisions concerning PFAS, this will prove to be another topic that the NDAA conferees will need to negotiate in the coming weeks. Below is an overview of the PFAS provisions that may or may not be included in the final bill.

No Comity Tonight

Upon recognition of a foreign insolvency proceeding under chapter 15 of the U.S. Bankruptcy Code, the foreign debtor may request additional assistance from the U.S. Bankruptcy Court under section 1507 or additional relief under section 1521. Such additional relief often includes requests to recognize and enforce in the United States specific orders entered by the foreign court. While such requests are freely granted, there are limits to the relief a foreign debtor may receive. For example, in In re Nexgenesis Holdings Ltda., No. 22-14043-BKC-LMI, 2024 WL 3616732 (Bankr. S.D. Fla. July 31, 2024) (In re Nexgenesis), the bankruptcy court denied the foreign representatives’ request for recognition of an asset freeze order because, among other reasons, it would be manifestly contrary to U.S. public policy to recognize the order, even though the Brazilian insolvency proceeding had been recognized as a foreign main proceeding under Chapter 15.

California Climate Disclosures Remain on Schedule

California is set to launch its first-in-the-nation mandatory climate disclosure framework next year as provided in the 2023 Climate Accountability Package, Senate Bills SB 253 and SB 261. (For more information on the Climate Accountability Package, see Pillsbury’s prior reporting here and here.) But the bills have not come without some lingering controversy over the ability of businesses to meet the aggressive January 1, 2026, deadline to report their carbon footprints and submit climate risk assessments to the California Air Resources Board (CARB), as well as CARB’s ability to adopt implementing regulations by this coming January 1. A proposal by California Governor Gavin Newsom to provide relief through two-year extensions for compliance arrived back in the form of a bill from the Legislature—SB 219—for his signature, but it was stripped of those extensions and only granted an additional six months for CARB to adopt regulations. On September 27, Newsom acquiesced and signed SB 219 into law. The development confirms the need for businesses to continue preparing for mandated climate disclosures by January 1, 2026, and to consider participating in the CARB rulemaking to emphasize the implementation concerns recognized by Newsom.

From AI Doomers to E/Accs: How SB 1047 and the 38 AI Laws in California Are Shaping Future AI Law

The California legislature sent 38 AI bills to the Governor’s office as the 2024 legislation session came to a close, eight of which have already been signed, regulating everything from deepfake nudes and AI-generated celebrity clones to election tampering. Governor Newsom has until September 30 to sign the rest, including California Senate Bill 1047, known as the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act. SB 1047 is one of the first significant regulations of artificial intelligence in the United States that, if signed, would place liability on the developers of AI models.

California Employers Required to Have a Workplace Violence Prevention Plan

According to the Occupational Safety and Health Administration (OSHA), workplace violence affects nearly two million American workers annually. In 2021, 57 people died from acts of workplace violence in California.

Department of Justice Settles with Las Vegas Casino for $130 Million

The Department of Justice (DOJ), through the U.S. Attorney’s Office (USAO) for the Southern District of California, recently announced a non-prosecution agreement with a Las Vegas casino, which forfeited over $130 million under the agreement. The agreement settled criminal allegations that the casino conspired with unlicensed money transmitting businesses (MTBs) worldwide to transfer funds for its financial benefit. This announcement is the latest example of the DOJ’s expanding focus on alleged money-laundering activities involving MTBs and international transfers of funds, particularly transfers connected with mainland China and mainland Chinese-related criminal activity.

SBA Proposed Rule to Change How Recertification Affects Small Business IDIQs and Bring More Uniformity Across Various SBA Programs

On August 23, 2024, Small Business Administration (SBA) published a proposed rule making certain changes to the Historically Underutilized Business Zone (HUBZone) program, as well as other programs, to promote consistency in SBA’s rules across the various socioeconomic government contracting programs. While the proposed rule makes numerous changes to the SBA programs, small businesses will be particularly interested in the proposed changes to SBA’s recertification rule.

District Court Ruling Bars Federal Trade Commission Non-Compete Rule for the Near Term

The Federal Trade Commission (FTC) and the Non-Compete Clause Rule (Rule)
Under Section 5 of the FTC Act, “[t]he Commission is [] empowered and directed to prevent persons, partnerships, or corporations … from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a)(2). As such, Section 6 of the FTC Act, grants the FTC the power to “[f]rom time to time classify corporations and … to make rules and regulations for the purpose of carrying out the provisions” of the FTC Act.