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.

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 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.

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.

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.

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.

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.

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.

On August 28, 2024, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule (RRE Rule) creating a reporting regime for transfers of residential real estate. This RRE Rule, proposed in preliminary form on February 16, 2024, supplements FinCEN’s current General Targeting Order (GTO) program for reporting of such transactions but is quite different in approach and scope. Unlike the GTO, it applies on a nationwide basis and without a floor amount of consideration.

The United States taxes a U.S. resident on their assets above a certain amount at death and non-residents on their U.S. assets. So, if someone dies owning assets worth more than their remaining lifetime exemption, a U.S. estate tax is typically due. Payment of this tax can often be delayed with the use of a Qualified Terminable Interest Property (QTIP) trust for the benefit of a surviving (U.S.) spouse. Additionally, spouses can transfer property to the other free of any transfer taxes, as transfers of property between spouses qualify for the unlimited marital deduction. Although transfers of property to a noncitizen spouse would not qualify for the marital deduction under Internal Revenue Code (IRC) Section 2056(d)(1), IRC Section 2056(d)(2)(A) provides an exception to the general rule. If the qualified domestic trust (QDOT) requirements under IRC Section 2056A are met, property that passes from a U.S. person to a noncitizen spouse in a QDOT qualifies for the marital deduction. An executor of the estate must elect QDOT treatment.

On August 22, 2024, the U.S. Department of Justice (DOJ) filed a complaint as intervenor in a False Claims Act (FCA) lawsuit filed against Georgia Tech Research Corporation and the Board of Regents of the University System of Georgia (Georgia Tech). The case was originally filed against Georgia Tech under seal in July 2022 by two whistle-blowers, its former associate director of cybersecurity and a former principal information security engineer.

Significant amendments to the Delaware General Corporation Law (DGCL) were signed into law by Governor John Carney on July 17, 2024 (SB 313). These amendments were initially introduced in March 2024 in response to three controversial Delaware Court of Chancery rulings, Moelis, Activision and Crispo, which called into question the validity of several well-established and commonly used market practices. SB 313 went into effect on August 1, 2024, and applies retroactively to all contracts and agreements made by a corporation (including merger and consolidation agreements) and all agreements, instruments or documents approved by a board of directors. However, SB 313 will not apply to or affect any civil action or proceeding completed or pending on or before August 1, 2024.

On July 2, 2024, the Occupational Safety and Health Administration (OSHA) issued a proposed rule for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings. If finalized, the proposed Section 1910.148 would be OSHA’s first federal heat standard. It would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction.

In 1993, the California Legislature amended Revenue and Taxation Code (RTC) sections 6011 and 6012 to exclude from California sales and use tax amounts charged for intangible personal property transferred with a technology transfer agreement (TTA) if the TTA separately stated a reasonable price for the tangible personal property (TPP). Nine years later, the State Board of Equalization (SBE) adopted Regulation 1507, Technology Transfer Agreements, to implement and interpret the TTA statutes and to incorporate the California Supreme Court’s holding in Preston v. State Board of Equalization, 25 Cal.4th 197 (2001). Subsequent litigation over the next 13 years in Nortel Networks, Inc. v. State Board of Equalization, 191 Cal.App.4th 1259 (2011) and Lucent Technologies, Inc. v. State Board of Equalization, 241 Cal.App.4th 19 (2015), invalidated portions of Regulation 1507, as well as Regulation 1502 (Computers, Programs and Data Processing). In the nine years since the Lucent decision, the SBE and its successor, the California Department of Tax and Fee Administration (CDTFA), have been engaged in a seemingly endless regulation project. There finally appears to be some meaningful movement. But first, a little background.

In In re Jughandle Brewing Co. LLC, 23-15703 (Bankr. D.N.J. June 3, 2024), the U.S. Bankruptcy Court for the District of New Jersey faced the following question: whether, in a chapter 7 case, postpetition, pre-rejection payments due under an unexpired lease of nonresidential real property must be treated as an administrative expense claim under section 503(b)(1), regardless of whether the rent payments were actual, necessary costs of preserving the estate. It answered the question in the negative, holding that there is no per se rule that a trustee’s obligation to perform postpetition lease obligations under section 365(d)(3) creates an administrative expense claim. And on the facts before it, the Court crafted a middle ground, allowing an administrative expense claim in favor of the landlord in an amount equal to three months of base rent less amounts paid to the landlord by the secured creditor as a use and occupancy fee for removal of its collateral, along with a general unsecured claim for prorated stub rent for the initial postpetition period. In so doing, the Court confirmed that courts may craft an appropriate remedy when a trustee or debtor in possession breaches a real estate lease before rejection on a case-by-case basis.

On August 15, 2024, the Department of Defense (DoD) released a long-awaited proposed rule implementing certain requirements of the Cybersecurity Maturity Model Certification (CMMC) program 2.0. As we have previously reported, CMMC is a program developed by the DoD to protect the Defense Industrial Base from cyber threats. Under this program, nearly all DoD contractors and subcontractors will be required to achieve certain levels of cybersecurity maturity. The DoD first announced the CMMC program in 2019, then issued an initial version of the program (CMMC 1.0) in November 2020. In November 2021, the DoD announced that it would be overhauling the CMMC and replacing it with CMMC 2.0. The purpose of CMMC 2.0 was to restructure the CMMC program and to reduce the cost and administrative burden of achieving cybersecurity compliance. On December 26, 2023, the DoD issued a proposed rule and related guidance implementing many aspects of CMMC 2.0. The newly released proposed rule would amend the Department of Defense Federal Acquisition Regulation Supplement (DFARS) to implement the contractual requirements related to CMMC 2.0. This new proposed rule is largely consistent with the December 26, 2023, proposed rule, but provides additional detail about how the CMMC program will be administered and introduces new contract clauses to implement the program.

Less than a year after the publication of the Executive Oder (EO) on the Safe, Secure, and Trustworthy Development of AI, the Department of Commerce has finalized three pieces of guidance to fulfill its obligations under the EO. In addition, the recently created AI Safety Institute (AISI) has provided draft guidance to help AI developers mitigate risk of dual-use foundation models. AISI is soliciting comments on this proposal, which are due by September 9. The National Institute of Standards and Technology (NIST) has released open-source software that can be used to test AI systems responses to adversarial attacks.

While major legal cases involving AI have largely focused on copyright issues, few cases thus far have directly addressed truthful advertising of AI products and AI-generated content. Indeed, the ease with which consumers and the public can be deceived by AI, as well as the fear of mal-intentioned interference in political elections, has underscored the urgency of considering legislation and regulations that are capable of addressing these issues directly.

The Federal Communications Commission (FCC) last week released a highly anticipated Notice of Proposed Rulemaking (NPRM) seeking comment on proposed disclosure requirements for political ads containing AI-generated content. The item was adopted earlier this month by a 3 – 2 party-line vote, nearly two months after FCC Chairwoman Rosenworcel first announced its circulation among the commissioners for consideration.

In April 2024, Chief Judge Martin Glenn for the U.S. Bankruptcy Court for the Southern District of New York rejected a provision in certain post-petition agreements with aircraft lessors (collectively, the “Aircraft Agreements”) requiring the aircraft lessor (and creditor) to vote its claim in favor of a not yet filed or negotiated chapter 11 plan. See In re GOL Linhas Aéreas Inteligentes S.A., No. 24-10118 (WG), 2024 WL 1716490 (Bankr. S.D.N.Y. Apr. 22, 2024). The Court’s decision, as well as other decisions in In re SAS AB and In re LATAM Airlines Group S.A., reflects a renewed focus on lock-up provisions by bankruptcy courts. This focus comes as debtors are requesting with increasing frequency similar commitments from creditors to attain the requisite votes for confirmation. None of these cases, however, resulted in a court disregarding the votes cast by the lessors.

The Federal Circuit’s decision in ZyXEL Communications Corp. v. UNM Rainforest Innovations (Appeal Nos. 2022-2220, 2022-2250, July 24, 2024) starts out as a garden variety appeal from an inter partes review proceeding (“IPR”) before the Patent Trial & Appeal Board (“PTAB”). However, the opinion takes a final, unexpected turn by remanding to the PTAB to reconsider whether the new substitute claims are unpatentable in light of collateral estoppel and an additional prior art combination that the petitioner never even raised.

OpenAI’s defense of the lawsuit brought by The New York Times (“The Times”) has sparked controversy relating to OpenAI’s discovery demand for access to reporter notes and other behind-the-scenes materials associated with millions of articles that appeared in The Times. These materials, the AI company argues, are crucial for assessing the copyrightability of The New York Times’ content, which content is being incorporated into OpenAI’s AI models.

Geothermal projects in the United States and abroad face scrutiny of their potential impacts on the surrounding environment and communities. Seismic activity, noise and water contamination are commonly cited concerns.

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.

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.”

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.

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.

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.

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.

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.

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.

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.”

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.

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.

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.

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.

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).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

On May 3, 2024, the Government Accountability Office (GAO) sustained a bid protest filed by ITility, LLC, which challenged the Department of Homeland Security’s decision to award a task order for financial and program management support services to Integrated Finance and Accounting Solutions, LLC in a best value procurement. The protester alleged that the agency’s evaluation of technical proposals was unreasonable in several respects and that the agency conducted a flawed best-value tradeoff analysis. In a rare decision, GAO sustained the protest because the agency failed to substantively address several allegations raised in the protest. GAO also concluded that the agency failed to reasonably evaluate proposals due to unrecognized discriminators in the protester’s proposal.

On April 23, 2024, the Department of Labor’s Wage and Hour division issued a final rule (the “Rule”) increasing the salary thresholds for the exemption from the Fair Labor Standards Act’s overtime requirement for bona fide executive, administrative, and professional (EAP) employees. The Rule also increased the minimum salary for exemptions for highly compensated employees and changed the methodology the Department will use to determine the applicable salary thresholds in the future. Barring court action blocking the Rule, the increases will go into effect in two phases, with the first phase taking effect July 1, 2024, and raising the minimum salary by $8,320 annually above the current minimum, and the second phase taking effect on January 1, 2025, when the new minimum annual salary for EAP employees to be exempt from overtime will be $23,088 higher than it is today.