California Combats Greenwashing with New Voluntary Carbon Offset and Carbon-Neutral and Low-Carbon Product Disclosure Law

On October 7, 2023, California Governor Gavin Newsom signed AB 1305 into law, requiring businesses marketing or selling voluntary carbon offsets (VCOs) or marketing products as having significantly reduced emissions within California to disclose on their website certain information concerning the projects that generated the VCOs and emission reductions. Additionally, AB 1305 requires the disclosure of certain information supporting any business activity or product purported to achieve net-zero emissions, carbon neutrality or a reduction in greenhouse gas (GHG) emissions. This law represents California’s latest attempt to reduce “greenwashing,” hold businesses accountable for claims concerning GHG emission reductions and intensify transparency within the VCO market. AB 1305 is effective January 1, 2024, and businesses are required to update their disclosures at least annually.

The "Insurance Neutrality" Doctrine is Heading to SCOTUS

In October 2023, the U.S. Supreme Court agreed to hear an appeal of the Fourth Circuit's decision in Truck Ins. Exch. v. Kaiser Gypsum Co. (In re Kaiser Gypsum Co.), 60 F.4th 73 (4th Cir. 2023). An alert on the Fourth Circuit's decision can be found here.

NCAA Proposes New Division I Subdivision Which Allows Universities to Directly Compensate Student-Athletes

Last week, NCAA President Charlie Baker, without advance notice, released a framework that, if adopted, would allow schools, for the first time, to directly pay student-athletes, fundamentally altering the NCAA’s current Name, Image and Likeness (NIL) rules and governance structure.

SEC Postpones Effective Date of Share Repurchase Disclosure Modernization Rule

Share Repurchase Rule Postponed
On November 22, 2023, the Securities and Exchange Commission (SEC) issued an order postponing the effective date of the Share Repurchase Disclosure Modernization Rule (“Share Repurchase Rule”), which became effective on July 31, 2023. The postponement order was issued in light of the October 31, 2023, decision by the U.S. Court of Appeals for the Fifth Circuit. The decision by the Fifth Circuit granted a petition for review and remanded the rule to the SEC to “correct the defects” identified in the rule by November 30, 2023. As a result of the SEC’s postponement order, the Share Repurchase Rule is stayed pending further action by the SEC.

Treasury Department and IRS Issue Proposed Regulations and Revenue Procedure on the Clean Vehicle Tax Credits under Section 30D of the Internal Revenue Code

As amended by the Inflation Reduction Act of 2022, IRC 30D provides for a tax credit of up to $7,500 for a new clean vehicle, consisting of $3,750 if certain critical mineral requirements are met and $3,750 if certain battery components requirements are met. Under the relevant rules, vehicles placed in service beginning in 2024 are not eligible if the battery includes battery components manufactured or assembled by a foreign entity of concern (FEOC), while vehicles placed in service beginning in 2025 are not eligible if the battery contains certain critical minerals extracted, processed or recycled by an FEOC.

Treasury Department and IRS Issue Proposed Regulations on the Energy Investment Tax Credit under Section 48 of the Internal Revenue Code

On November 17, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-132569-17] in the Federal Register providing further guidance on the Energy Investment Tax Credit (ITC) under section 48 of the Internal Revenue Code (IRC) of 1986, as amended. The proposed regulations expand on existing Treasury regulations under IRC section 48 to incorporate the changes made by the Inflation Reduction Act of 2022. As relevant here, the Inflation Reduction Act of 2022 extended the existing ITC for most projects that begin construction before January 1, 2024, and modified it by expanding the types of energy properties that are eligible for the credit, allowing for increased credit amounts for energy projects that satisfy the prevailing wage and apprenticeship requirements and providing opportunities for several bonus credits.

FinCEN Extends Beneficial Ownership Reporting Deadline for Companies Created or Registered in 2024

As described in our previous client alert, the Corporate Transparency Act (CTA), which becomes effective on January 1, 2024, creates novel obligations for millions of entities to report beneficial ownership information (BOI) and certain other information to FinCEN. This requirement extends to private entities previously not otherwise subject to any reporting requirements. Under prior FinCEN rulemaking (the BOI Rule), companies created or first registered after January 1, 2024, would have had only 30 calendar days (the notice date) after the date that is the earlier of the date on which a company receives actual notice or public notice that it has been created or registered to determine whether they are subject to the CTA and, if so, report required information to FinCEN. However, on November 29, 2023, FinCEN amended the BOI Rule to extend that reporting deadline to 90 calendar days after the notice date for companies created or first registered in 2024.

NRC Issues Draft Guidance to Facilitate Reactor Siting

On October 18, 2023, the U.S. Nuclear Regulatory Commission (NRC) issued draft regulatory guide (DG), DG – 4034, for public comment. DG – 4034 includes a proposed Revision 4 for Regulatory Guide (RG) 4.7, “General Site Suitability Criteria for Nuclear Power Stations.” RG 4.7 provides guidance on the major health, safety and environmental site characteristics the NRC staff considers in determining the suitability of proposed sites for nuclear power plants. Essentially, it lays out the methods for determining whether a reactor may be located at a particular potential location.

International Counter Ransomware Initiative Pledges to Halt Government Ransom Payments, but with Exceptions

The Annual Meeting
The International Counter Ransomware Initiative (CRI) is an international initiative comprising 48 countries, the European Union and INTERPOL. The United States is a prominent member of this group, not only in hosting this annual meeting but also by serving as the CRI Secretariat. The CRI aims to “undercut the viability of ransomware, pursue threat actors, counter illicit finance underpinning ransomware ecosystem, collaborate with the private sector to defend against ransomware attacks, and cooperate internationally to address all elements of the ransomware threats.” The CRI focuses on partnerships and information sharing to bolster collective security against ransomware threats.

Proposed Rules Overhaul Cybersecurity Requirements for Government Contractors

On October 3, 2023, the Federal Acquisition Regulation (FAR) Council proposed two rules, Cyber Threat and Incident Reporting and Information Sharing and Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems. The proposed rules partially implement Executive Order (EO) 14028, Improving the Nation’s Cybersecurity, which focuses on improving the nation’s cybersecurity and protecting against cyber threats by revamping incident reporting, information sharing for federal contractors and implementation of related cybersecurity policies. On November 1, 2023, the FAR Council extended the comment period for these proposed rules until February 2, 2024.

ASBCA’s FY 2023 Annual Report: Contractor Appeals Are Way Down but Dispositive Motion Activity Is Way Up

On November 1, 2023, the Armed Services Board of Contract Appeals (ASBCA or Board) issued its fiscal year (FY) 2023 annual report, covering the period from October 1, 2022, through September 30, 2023. During FY 2023, contractors filed 342 new appeals at the ASBCA. This activity represents a 15% decrease from the number of appeals docketed during FY 2022. In fact, this was the lowest number of docketed appeals during any fiscal year since 1979. A significant percentage of the appeals—105 of the 342 new cases (or roughly 30%)—were filed against the U.S. Army Corps of Engineers. Over the last 10 years, the U.S. Army Corps of Engineers has generally been the agency against which most new ASBCA appeals have been filed.

SEC Adopts Rule Changes to Shareholder Ownership Reporting

On October 10, 2023, the U. S. Securities and Exchange Commission (SEC) adopted amendments (Amendments) to the beneficial ownership reporting requirements for beneficial owners of more than 5% of a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (Exchange Act). The Amendments adopt, modify or decline to adopt the rule amendments initially proposed in the SEC’s February 10, 2022, release (2022 Proposals).

The Impact of Artificial Intelligence on Vulnerable Populations in the Workforce

Charting Expectations for AI
The rapid pace of artificial intelligence (AI) development is exceeding expectations, making it difficult to predict the exact next wave of AI progress. Even with these challenges, several studies considering how AI impacts the workforce are finding consistent patterns in their forecasts. Studies find AI will affect a wide spectrum of jobs but emphasize the impact on lower-wage professionals. AI brings more opportunity but may not bring opportunity equally to all employment sectors. While the future workforce is uncertain, studies provide guidance on how companies working with AI can take precautionary measures now to help protect their workforce from AI-generated harms while also preparing their employees to benefit from AI’s potential for streamlining work and providing greater efficiencies in the office.

Not So Fast: Satisfaction of Default-Rate Interest Required before Loan Reinstatement

For distressed borrowers seeking to reorganize, the Bankruptcy Code provides multiple options, including reinstatement of prepetition defaulted and accelerated debt. Given recent staggering increases in interest rates, reinstatement can be an attractive option because it allows a debtor to de-accelerate a defaulted loan and reinstate the loan’s original terms, including the original interest rate, over a creditor’s objection by making the creditor’s claim “unimpaired.” Although reinstatement can be beneficial, courts are split on whether a debtor must pay a secured lender default-rate interest and fees as a condition to reinstating a loan under a chapter 11 plan.

Interim Rule Establishes New Supply Chain Diligence Requirements for Contractors

On October 5, 2023, the Federal Acquisition Regulatory (FAR) Council issued an interim rule that implements the requirements of the Federal Acquisition Supply Chain Security Act (FASCSA) and creates three new FAR clauses that prohibit contractors from delivering or using covered articles and sources subject to exclusion or removal orders issued under the FASCSA. The FASCSA, which was signed into law on December 21, 2018, aims to prevent foreign adversaries from creating and exploiting vulnerabilities in information and communications technology to commit malicious cyber-enabled actions against the U.S. government. The FASCSA established the Federal Acquisition Security Council (FASC), an executive branch interagency council authorized to perform a variety of functions to further these goals.

NCAA Rejects Theory That Apparel Company Sponsorship Agreement Converts Company and Employees into Boosters

In 2023, the name image and likeness (NIL) allowance, the transfer portal, conference realignment and the NCAA’s overall governance structure attracted a significant amount of media attention. But one of the most important issues in industry of collegiate athletics rules enforcement and collegiate sports law continues to be what, precisely, constitutes a “representative of [a university program’s] athletics interests,” colloquially known as a “booster.” That is, because, under long-standing NCAA legislation, member institutions are held responsible for the actions of their boosters under the very low evidentiary standard of “known or should have known.”

OFAC Issues New Sanctions Targeting Hamas’s Financing Networks

Following the October 7 attack on Israel by Hamas, the Treasury Department’s Office of Foreign Assets Control (OFAC) has undertaken several initial sanctions steps to counter terrorist financing and call attention to financing networks, ongoing proliferation and terrorist support by Iran and due diligence expectations.

President Biden Issues Long-Awaited Executive Order on Safe, Secure and Trustworthy Artificial Intelligence

On October 30, President Biden issued the long-awaited Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (AI), the first order to navigate AI’s impact across sectors and to help agencies and consumers harness the benefits of AI while mitigating risks.

Federal Banking Regulators Issue Final Rule Overhauling Community Reinvestment Act Regulations

On October 24, 2023, the Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System (FRB), and Office of the Comptroller of the Currency (OCC) issued a joint final rule that makes extensive amendments to the regulations that implement the Community Reinvestment Act (CRA). The agencies’ stated goal in issuing the Final Rule is to “strengthen and modernize” the CRA regulations, which have not been significantly revised in nearly three decades. The Final Rule is the culmination of a lengthy process that ends years of uncertainty about the fate of the agencies’ CRA regulations.

Government Accountability Office Publishes Fiscal Year 2023 Bid Protest Statistics

On October 26, 2023, the Government Accountability Office (GAO) published its Bid Protest Annual Report to Congress for Fiscal Year 2023. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for FY 2023 bid protest activity. The report also includes a chart providing similar bid protest statistics for fiscal years 2019 – 2023. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

Expansion of Global Capability Centers Requires Anticorruption Compliance Planning

In its Vision 2030 report, EY India projects that the number of global capability centers (GCCs) in India will increase from approximately 1,600 GCCs in 2023 to 2,400 GCCs in 2030, with the market size of GCCs increasing from about $43 billion to over $100 billion during this period. This dramatic increase forecasted by EY India is not surprising. GCCs provide a number of attractive benefits, including access to a very large pool of highly skilled IT resources in India, the ability to leverage this talent to build internal teams that can deliver on strategic digital initiatives with speed and agility, the opportunity to tap into India’s robust startup ecosystem, and the potential savings associated with lower labor rates and other costs of doing business in India.

New OSHA Electronic Injury and Illness Reporting Requirements for 2024

In July 2023, the Occupational Safety and Health Administration (OSHA) finalized its “Improve Tracking of Workplace Injuries and Illnesses” rule, which requires establishments with 100 or more employees in certain designated high-hazard industries (including agricultural, food production, manufacturing, retail, wholesale, transportation, medical and entertainment) to electronically submit information from their OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and Form 301 (Injury and Illness Incident Report) once a year. Specifically, employers must submit detailed information about each recordable injury and illness, including the date, physical location and severity of the injury or illness; details about the worker who was injured; and details about how the injury or illness occurred. The rule is effective on January 1, 2024, and annual reporting is due March 2, 2024, through OSHA’s Injury Tracking Application (ITA).

U.S. Education Department’s New Accountability and Transparency Rules for Postsecondary Institutions to Take Effect in July 2024

On September 27, 2023, after receiving over 7,500 public comments, the U.S. Department of Education (ED) announced final regulations concerning the Gainful Employment Rule and the financial value transparency (FVT) framework it had proposed in May. The final regulations were published in the Federal Register on October 10, 2023, and will take effect on July 1, 2024.

In Latest Net Neutrality Proceeding, the FCC Proposes Reclassifying Broadband Internet Access as a Telecommunications Service, Largely Reinstating 2015 Open Internet Rules

At its October 2023 Open Meeting, the Federal Communications Commission (FCC) proposed rules that, if adopted, would reclassify Broadband Internet Access Service (BIAS) as a telecommunications service and reinstate the Commission’s authority adopted in 2015 but discarded in 2018. The item was supported by the three Democrats on the Commission and opposed by the two Republican commissioners. Since 2005, when the FCC adopted its Internet Policy Statement, Commission leaders have sought to regulate or deregulate BIAS through policy statements, by placing conditions on internet access companies seeking to merge, and, most notably, by classifying internet access service as either an information service, which affords the FCC limited regulatory authority, or a telecommunications service, which gives the FCC more robust tools to regulate service provider conduct.

Biden Administration Continues Campaign to Crack Down on Junk Fees

Federal consumer protection agencies and the White House have escalated their efforts to target so-called “junk” or surprise, add-on fees in a wide range of industries. The Biden Administration’s focus on junk fees has been intensifying since the beginning of 2022, as the White House has realized the popularity of these consumer protection measures in the midst of rising inflation. The Administration’s junk fee initiative, driven by the White House Competition Council formed in July 2021, is yielding new regulatory requirements across a wide swath of consumer-facing industries, and is likely to lead to enforcement actions in the not-too-distant future.

The Legal Impact of AI on Associations

There has been a rush of news and debate around Artificial Intelligence (AI) since the launch of ChatGPT in late 2022. AI is nothing new; you likely interact with it every day via spellcheck, virtual assistants and email spam filters. Generative AI, however, and its mass adoption for both personal and professional use, is a more recent phenomenon, and you may not have considered the legal implications and potential impact on your association.

Estate and Tax Planning 2023 Update: Act While You Can

The 2023 taxation climate presents challenges—as well as opportunities—for wealthy individuals and families. This September, the Internal Revenue Service (IRS) announced its concentrated focus on high-income taxpayer compliance, while in June the IRS and Department of the Treasury released guidance that allows individuals, estates and trusts to benefit from certain new transfer opportunities of renewable energy credits. With the scheduled sunset of the all-time-high unified estate and gift tax exclusion amounts, as well as the IRS taking harsh positions against high-income earners, now is the time to consider opportunities for estate and tax planning. Very often, these opportunities to save tax will include making gifts to children, including in trust for them, and using the generation-skipping transfer (GST) exemption to make the potential transfer tax savings on that gift last through many generations.

California Bill Designed to Support Underrepresented Entrepreneurs Signed into Law

On October 8, 2023, California Governor Gavin Newsom signed Senate Bill (SB) 54 into law. SB 54 will become effective on March 1, 2025, and will require “covered entities” to report demographic information regarding the founding teams of all businesses in which such “covered entities” had invested in the prior year. This report would be required annually and would be made to the California Civil Rights Department (CRD).

The Corporate Transparency Act: What You Need to Do Now

As has been widely reported, the Corporate Transparency Act (CTA) will become effective January 1, 2024, creating new obligations for millions of public and even the smallest private companies to report beneficial ownership information (BOI reports) with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Companies that are not exempt from CTA reporting (Reporting Companies), that are created or registered on or after the effective date, will have 30 days after they are formed, under current rules, to comply with the CTA reporting obligations. Non-exempt companies created before the effective date will have until December 31, 2024. For more information on the exemptions from the CTA, please refer to the Pillsbury Client Alert published on June 12, 2023.

Public Companies Required to Adopt Clawback Policies by December 1, 2023

In late 2022, the SEC adopted a new rule (Rule 10D-1) and rule amendments (collectively, the “Rules”) that, through listing standards promulgated by the national exchanges (primarily NYSE and Nasdaq), will require all issuers with securities listed in the United States to adopt an incentive-based compensation (IBC) recovery policy (hereinafter, a “clawback policy”). The Rules are sweeping and impact all domestic issuers, as well as foreign private issuers, including those whose only U.S.-listed securities are Level 2 and 3 ADRs. The NYSE and Nasdaq final listing rules implementing the Rules were approved by the SEC on June 9, 2023, and importantly, for NYSE and Nasdaq-listed companies, require the adoption of a compliant clawback policy by no later than December 1, 2023.

Department of Defense Designates Eight Technology Hubs to Create “Lab to Fab” Pathways for Microelectronics Researchers

On September 20, the Department of Defense (DoD) announced nearly $240 million dollars to eight regional innovation hubs that will accelerate U.S. microelectronics manufacturing industry through the Microelectronics Commons, the Department’s newest program to accelerate product deployment from research to end commercialization. Companies working in the semiconductor industry should consider opportunities to partner and team with the established hubs that will be funding prototype projects key to the U.S. defense.

Applying Environmental Justice to the Regulated Community: What to Expect and How to Plan Accordingly

Environmental justice (EJ) has been a central focus of the Biden Administration, which has encouraged a “whole-of-government” approach. Notably, this encouragement to address EJ issues, while backed by multiple executive orders (EOs), has lacked any federal law upon which agencies can enforce responsive action. Agencies, such as the Environmental Protection Agency (EPA) and Department of Justice (DOJ), have nevertheless sought creative avenues to enforce EJ problems. As EJ appears to be a continued focus of the Biden Administration, those that operate in the environmental space should be aware of recent developments and their impact on business operations and considerations.

Funding Application is Open for SMART Grant Program

The SMART Grant Program
The Bipartisan Infrastructure Law (BIL) established the Strengthening Mobility and Revolutionizing Transportation (SMART) Grants Program, a competitive funding program for demonstration projects that improve transportation efficiency and safety.

Recent Updates on Foreign Investment Restrictions and Export Controls Governing Semiconductors, Quantum Computing and Artificial Intelligence (AI)

From August 27 to August 30, U.S. Secretary of Commerce Gina Raimondo visited China, marking the first trip to China by a U.S. commerce chief in five years. The trip, which came amid growing tensions between China and the United States, sought to open dialogue on crucial matters, including export controls, investment restrictions and national security. One reported success from Raimondo’s trip was the creation of a commercial working group which will meet twice a year at the vice minister level. While Raimondo stressed that this group will not “solve everything overnight,” it has been hailed as a welcome step towards transparency between either country.

When Does an Alter Ego Suit Alleging Debtor and Non-Debtor Are “One and the Same” Violate the Discharge Injunction?

In RS AIR, LLC v. NetJets Aviation, Inc. (In re RS AIR, LLC), 2023 Bankr. LEXIS 1453, 2023 WL 3774652 (9th Cir. BAP June 2, 2023), the Ninth Circuit Bankruptcy Appellate Panel (BAP) concluded that a discharge injunction is not violated by an alter ego claim against a non-debtor that alleges that the debtor and non-debtor defendant are one and the same. The BAP reasoned that a discharge only protects a debtor from personal liability, not any other person or entity (such as a co-obligor or guarantor) that is liable with a debtor, and affirmed an order denying the debtor’s motion for contempt for violations of the discharge injunction.

The Looming Government Shutdown—What Contractors Can Do to Prepare

The federal government’s new fiscal year begins on October 1, 2023. Given the current political climate, Congress may not agree on a new budget by the September 30 deadline. This creates a significant risk that the government will soon shut down for days or even weeks. If this happens, all executive branch operations will cease except for those deemed “essential,” a result which will significantly impact government contractors.

New Digital Asset Regulations Provide Glimmers of Much-Needed Clarity

On August 25, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-122793-19] in the Federal Register, clarifying requirements under the Infrastructure Investment and Jobs Act (IIJA). The IIJA was enacted almost two years ago in November 2021, and established digital asset transaction reporting requirements addressing who is specifically responsible for furnishing information to the IRS and cryptocurrency customers for digital asset transactions. The act included definitions for digital assets and “digital asset brokers,” the latter of which was concerningly broad in scope. Clarifying follow-up regulations have been arguably slow in coming.

Treasury Department and IRS Issue Proposed Regulations on the Prevailing Wage and Apprenticeship Requirements under the Inflation Reduction Act of 2022

On August 30, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-100908-23] in the Federal Register providing further guidance on compliance with the prevailing wage and apprenticeship requirements under the Inflation Reduction Act of 2022 (IRA), which taxpayers must comply with in order to receive the increased credit amounts (i.e., base credit amount multiplied by five) for new and continuing energy credit provisions. The proposed regulations expand upon prior guidance, IRS Notice 2022-61, which was issued on November 30, 2022, in order to start the 60-day clock on the start-of-construction exception from compliance with the prevailing wage and apprenticeship requirements. For Pillsbury’s analysis on IRS Notice 2022-61, use this link.

Practical Implications of the DOL’s Proposed Increase to the Minimum Salary Level for Exempt Employees

On August 30, 2023, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking (NPRM), proposing to update and revise regulations under section 13(a)(1) of the federal Fair Labor Standards Act (FLSA), which governs minimum salary thresholds for employees to be exempt from the FLSA’s minimum and overtime wage requirements.

New Opportunities to Transfer Renewable Energy Tax Credits under the IRA: What is Possible for Individuals and Pass-Through Entities

On June 14, 2023, the Department of the Treasury and the Internal Revenue Service (IRS) released guidance on Internal Revenue Code (IRC) Section 6418, added as part of the Inflation Reduction Act of 2022 (P.L. 117-169)(IRA), granting taxpayers a new way to monetize certain tax credits. The guidance included proposed regulations relating to the transferability of tax credits under IRC Section 6418 (Transferability Guidance), temporary regulations regarding information and registration requirements (Pre-Filing Registration Guidance) and a series of frequently asked questions. (For a more general summary of this guidance, refer to our prior alert.) Notably, despite the hopes of tax practitioners and industry groups to the contrary, the new proposed regulations apply the passive activity rules of IRC Section 469 to transferees of tax credits under IRC Section 6418, which impacts the ability of individuals (and estates, trusts and certain corporations) to benefit from the credits. Additionally, the proposed regulations provide that transferees will bear the risk of certain events that result in a recapture of previously claimed tax credits.

One Contractor Hurdle Defeated: Federal Circuit Holds That the “Sum Certain” Requirement for CDA Claims is Not Jurisdictional

On August 22, 2023, the Federal Circuit reversed and remanded an Armed Services Board of Contract Appeals (ASBCA or Board) decision on appeal by ECC International Constructors, LLC (ECCI). The Federal Circuit held that the requirement to state a sum certain amount in a Contract Disputes Act (CDA) claim is mandatory but not jurisdictional.

The SBA Makes Significant Changes to 8(a) Program

On July 19, 2023, the U.S. District Court for the Eastern District of Tennessee issued an injunction that prevents the Small Business Administration (SBA) from utilizing a “rebuttable presumption” of social disadvantage for specific minority groups when evaluating applicants’ eligibility for its 8(a) program. The opinion in Ultima Servs. Corp. v. U.S. Department of Agriculture declared the SBA’s rebuttable presumption unconstitutional under the Fifth Amendment of the U.S. Constitution. This ruling departs from the SBA’s longstanding practice of using this presumption to address discriminatory practices and promote equal opportunities.

Gatekeeping Provisions in Chapter 11 Plans May Provide an Alternative to Nonconsensual Nondebtor Releases

Background
A nondebtor release releases the claims of a nondebtor party against another nondebtor party related to a debtor, potentially for both pre-petition and post-petition conduct. A nondebtor exculpation is a limited release of claims against nondebtor parties who participated in a bankruptcy case, e.g., trustees and creditor committee members, and typically concerns post-petition conduct. A nondebtor release or exculpation is “nonconsensual” if imposed on a releasing party without its explicit or, in some cases, implicit consent.

Provisions Relating to Digital Assets under the Financial Services and Markets Act 2023 Come into Force

Effective August 29, 2023, the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations (SI 2023/779) (FSMA 2023) explicitly brings digital assets within the regulatory perimeter, creates a new designated activities regime (DAR), introduces regulations for stablecoins used as a means of payment (Payment Stablecoins), and creates a framework to establish financial market infrastructure sandboxes.

Administration Poised to Act on “Internet of Things” Devices

The Federal Communications Commission (FCC or Commission) has issued a Notice of Proposed Rulemaking (NPRM) to create a labeling program for Internet of Things (IoT) devices with comments due September 25, 2023, and reply comments due October 10, 2023.

Biden Administration Issues Guidance to Universities on Implementing Supreme Court Affirmative Action Ruling

On Monday, August 14, the Department of Justice’s Civil Rights Division and the Department of Education’s Office for Civil Rights (together, the “Departments”) issued a letter (the “Letter”) to colleges and universities advising compliance with the Supreme Court’s June 29, 2023, decisions, Students for Fair Admissions v. Harvard and Students for Fair Admission v. University of North Carolina (together, SFFA). The guidance urges colleges and universities to “redoubl[e] efforts to recruit and retain talented students from underserved communities, including those with large numbers of students of color” and to adopt “a greater focus on fostering a sense of belonging.”

OMB Finalizes “Build America, Buy America” Domestic Content Guidance

On August 14, the White House Office of Management and Budget (OMB) published its final guidance (Final Guidance) on the implementation of the Bipartisan Infrastructure Law (BIL), which includes domestic content requirements reflected in the Build America, Buy America Act (BABA). The pre-publication version is currently available here.

California Courts Continue Allowing Employees and Consumers to Return to Court Following Late Payment of Arbitration Fees

Sections 1281.97 through 1281.99 of the California Code of Civil Procedure set strict penalties for nonpayment of arbitration fees in employee and consumer arbitrations. Under those sections, the drafter of an employee or consumer arbitration agreement is in material breach of the agreement if it does not pay arbitration fees within 30 days. Following such a breach, employees and consumers may withdraw their claim from arbitration and proceed in court, and are also entitled to their attorneys’ fees and costs incurred both during the abandoned arbitration and in withdrawing from arbitration.

Pointers for Employers on the Proposed Regulations Interpreting the PWFA

The Pregnant Workers Fairness Act (PWFA), which went into effect in June 2023, requires employers, absent undue hardship, to provide reasonable accommodations to a qualified employee or applicant for employment for any known limitations related to, affected by or arising out of pregnancy, childbirth or related medical conditions.

Unleashing the AI Imagination: A Global Overview of Generative AI Regulations

This article discusses the latest developments of legislations on Generative AI in the United States (U.S.), Europe (EU), the United Kingdom (UK) and the People’s Republic of China (China or the PRC).