Offit Kurman Blogs

Commercial Litigation

When the Mammoth Gets Out: Is a Genetically Engineered Animal a Product, or Is It Livestock?

It is a little before dawn when the fence gives way. The animal that steps through it is not supposed to exist. It stands nearly 11 feet at the shoulder, wrapped in a coat of coarse, rust-colored hair, its breath rising in the cold. It weighs five tons. A quarter mile off, a rancher hears a low rumble he feels in the floorboards before he hears it in the air. By the time he reaches the window, the thing is already in his neighbor’s wheat field, then his neighbor’s fence, then his neighbor’s parked truck. This is less far-fetched than it used to be. Colossal Biosciences, a company based in Dallas, has spent several years and a great deal of money on what it calls de-extinction, using gene editing to bring back species the earth has not seen in thousands of years. i The woolly mammoth is its most famous target. Whether or not a mammoth ever walks out of a lab, the company has already done something quieter that ought to interest lawyers. It has made us ask what body of law would govern the animal if one ever did. Because when that mammoth flattens the fence and crosses the wheat field, the first hard question is not biological. It is legal. Who pays for the wheat, the fence, and the truck? To answer that, a court will have to decide something no court has decided before. Is a woolly mammoth livestock, or is it a product? The Law Already Knows What to Do with Animals The law has been sorting out liability for wayward animals for a very long time, longer than it has handled almost anything else. Cattle have wandered into neighbor’s crops since there were neighbors and crops, and the common law worked out rules for the aftermath.  The modern American version lives in the Restatement (Third) of Torts, which sorts the animal kingdom into a few practical categories. An owner of livestock that strays onto a neighbor’s land and does damage is generally strictly liable for the intrusion. There is no need to prove the rancher was careless, only that the cattle got out and the corn got eaten. An owner of a wild animal, meaning a species that has not been domesticated and tends to hurt people unless restrained, is strictly liable for the harm it causes. Everyone understands that keeping a tiger is a different proposition from keeping a cow. And an owner of an ordinary domestic animal becomes strictly liable once he knows, or has reason to know, that his particular animal has dangerous tendencies abnormal for its kind. That is the rule behind the old idea that every dog gets one free bite.ii Underneath all of this runs a deeper legal principle. In 1868, the House of Lords decided Rylands v. Fletcher, a case that had nothing to do with animals. A mill owner built a reservoir on his land. It burst through some abandoned mine shafts and flooded his neighbor’s coal mine. The court held him liable even though he had not been negligent, and it announced a rule that has echoed through the common law ever since. A person who brings onto his land something likely to do mischief if it escapes keeps it there at his peril, and answers for the damage if it gets loose.iii The Rylands principle appears to fit this scenario. A wooly mammoth in a wheat field is surely something extraordinary and something likely to do mischief if it escapes.  Neither Quite Animal nor Quite Product So the law has categories, and at least one seems to fit. If the mammoth is just an exotic, dangerous beast, the wild-animal rule imposes strict liability, and the inquiry ends there. If it is closer to livestock, the trespassing-animal rule imposes strict liability for the crops and the fence. Either way the neighboring rancher recovers. Where is the difficulty?  The difficulty is that every one of these doctrines quietly assumes something that is not true of a mammoth. Each assumes the species already exists and that people have built up some working knowledge of how it behaves. Cattle stray and trample. Tigers maul. A dog that has bitten once may bite again. The categories work because generations of experience have filled them.  No one has that experience with a mammoth. No rancher has raised one. No veterinarian has treated a herd of them. No actuary has a drawer full of mammoth claims. The last person with any practical knowledge of the species died before the pyramids were built. The dangerous-propensities rule asks what is normal for the animal’s kind, and for this animal nobody alive can answer.  There is a second problem. A cow is born. A tiger is born. The mammoth was designed. Somewhere a research team chose its traits, selecting for cold tolerance, for size, for coat, editing a genome the way an engineer sets a tolerance on a drawing. The animal in the wheat field did not simply get loose. It is the output of a manufacturing process. It’s a product.  The Law Also Knows What to Do with Products Products liability exists to hold manufacturers responsible for the things they design and sell into the stream of commerce. The logic is intuitive. The company that decides how a product will be built, and profits from selling it, is the party best placed to make it safe and to pay when it is not. The doctrine asks a familiar set of questions. Was there a design defect, meaning the thing was unreasonably dangerous as intended? Was there a manufacturing defect, meaning this particular unit came out different from its design? Was there a failure to warn, meaning the maker did not tell foreseeable users and bystanders what they needed to know to stay safe?iv Now ask those same questions about the mammoth. If the animal is aggressive because a team selected for size and dominance, is that a design defect? If a genetic edit expressed differently in this individual than the company intended, and produced a beast more unpredictable than the blueprint promised, is that a manufacturing defect? If the company handed the animal to a preserve without warning that its containment needs went beyond anything in ordinary ranching, is that a failure to warn? None of these questions is absurd. Every one of them sounds like a products case.  This is the collision at the heart of the problem. Livestock law assumes an animal that is born and merely owned. Products law assumes an object that is designed and sold. A genetically engineered mammoth is both at once. It is born and built, owned and manufactured, alive and, in the coldly commercial sense, a product. It does not fit either box, because it was never meant to exist in a world that has only two boxes.  Who Pays for the Damage? Line up the possible defendants. First, there is the owner, the preserve or facility that held the animal and let it escape. This is the classic livestock posture. You owned the beast, you failed to contain it, you answer for the damage. Straightforward, and probably right as far as it goes.  However, there is also the creator, the company that designed the animal, chose its traits, “manufactured” it, and put it into the stream of commerce. If the injury flowed from a characteristic the company deliberately engineered, the rancher’s lawyer will not be content to sue only the party that owned the fence. He will follow the deeper pocket back to the drawing board and argue that a company cannot design a five-ton animal, sell it, and then walk away from the predictable results of its own design choices.  Likely, courts will end up borrowing from both traditions at once. The owner answers under animal-law principles for failing to contain the creature. The creator answers under products principles for the traits it built into it. That is not a tidy rule. But tidy rules tend to be the ones the law inherits for problems it has already seen. This is a problem the law has not seen, and the first courts to face it will be improvising with borrowed tools.  The Quiet Gatekeeper: Insurance There is one more player in this drama, and it may matter more than any court. Long before a judge rules on whether a mammoth is a product or livestock, an underwriter has to decide whether it can be insured at all, and at what price. Insurers price risk from data, and here there is none. There is no loss history and no mortality table for an animal that has been extinct for millennia. Faced with that kind of uncertainty, an insurance market does one of two things. It refuses the risk, or it prices the risk so high that the underlying activity stops making economic sense.  The mammoth may never be stopped by a statute. It may simply turn out to be uninsurable.  Living Products are Coming Either Way It would be easy to file all of this under science fiction and move on. That would be a mistake. The mammoth is the most theatrical example of a category that is already arriving in quieter forms, and it is not only about giants. Colossal’s own roster runs well past the mammoth, to the Tasmanian tiger, the dodo, the moa, the South African bluebuck, and the dire wolf, whose pups the company says it has already produced.v Add the gene-edited cattle and hogs, the engineered salmon, and the disease-resistant crops already moving toward market, and the pattern is hard to miss. A growing catalogue of organisms are, unmistakably, designed. Each raises a gentler version of the question the mammoth asks so loudly. When a living thing is engineered by a company and sold into the world, is it an animal, a product, or some third thing the law has not yet named?  For centuries tort law has kept two sets of rules on two separate shelves. Animals are born, and the law of animals governs them. Products are made, and the law of products governs them. The whole structure rests on the assumption that living things and manufactured things are different kinds of things. Synthetic biology quietly dissolves that assumption. It produces organisms that are grown rather than assembled, that reproduce rather than roll off a line, and that were still designed as deliberately as any machine.  So when the mammoth finally puts its shoulder into that fence, or, more likely, when some engineered animal with a far less exciting name does something a court has to sort out, the judge will reach for the tools on hand. She will find two bodies of law built for two kinds of things and a defendant that is somehow both. The mammoth is a good way to notice the problem. It is not, in the end, what the problem is about. The problem is that biology is becoming an engineering discipline, and the liability rules were written for a world in which it was not.  i Colossal Biosciences, The De-Extinction Company, https://colossal.com (last visited Sept. 12, 2026).  ii Restatement (Third) of Torts: Liab. for Physical & Emotional Harm § 21 (Am. L. Inst. 2010) (intrusion by livestock or other animals); id. § 22 (wild animals); id. § 23 (abnormally dangerous domestic animals with known dangerous tendencies).  iii Rylands v. Fletcher (1868) LR 3 HL 330 (appeal taken from Eng.), aff’g Fletcher v. Rylands (1866) LR 1 Ex 265 (Blackburn, J.).   iv Restatement (Third) of Torts: Prods. Liab. § 2 (Am. L. Inst. 1998) (distinguishing manufacturing defects, design defects, and defects based on inadequate warnings).   v Colossal Biosciences, Our Species, https://colossal.com/species/ (last visited Sept. 12, 2026) (listing the woolly mammoth, thylacine, dodo, moa, bluebuck, and dire wolf); see also Colossal Biosciences, Dire Wolf, https://colossal.com/direwolf/ (last visited Sept. 12, 2026) (announcing the birth of dire wolf pups). 

September 23, 2026

Real Estate

Commercial Real Estate Closings in Delaware: What Out-of-State Counsel and Title Companies Need to Know

Commercial real estate transactions frequently cross state lines. A lender may be headquartered in New York, the borrower may be a Delaware limited liability company, the property may be part of a national portfolio, and the title company may be coordinating the transaction from an office hundreds of miles away. When one of the properties is located in Delaware, however, there is an important difference that out-of-state counsel and title companies need to understand early in the transaction: closings involving Delaware real property require the involvement of a Delaware-licensed attorney. For attorneys and title professionals accustomed to closing transactions in other jurisdictions, Delaware's requirements can initially seem unusual. In many states, a national title company can coordinate virtually the entire closing process, including title, escrow, execution, recording, and disbursement. Delaware takes a different approach. Understanding that difference at the beginning of a transaction can make the Delaware portion of a commercial or multi-state real estate closing considerably easier. The Mid-Atlantic Decision and the Scope of Delaware Counsel's Role  The Delaware Supreme Court has determined that significant components of a real estate settlement constitute the practice of law. The foundation for Delaware's approach is In the Matter of Mid-Atlantic Settlement Services, Inc., 755 A.2d 389 (Del. 2000), commonly referred to as Mid-Atlantic. Delaware's rules regarding attorney involvement in real estate transactions developed further following that decision. Under the Mid-Atlantic line of authority, a Delaware-licensed attorney is required to conduct the closing of a sale of Delaware real property. Attorney involvement is likewise required for a refinancing secured by Delaware real property. But the Delaware attorney's responsibility extends beyond simply appearing at the closing table. Delaware counsel must be involved, directly or in a supervisory capacity, in all legal aspects of the transaction affecting the transfer of title or the use of Delaware real estate as security for an obligation. Delaware Counsel Must Be Meaningfully Involved in the Closing Process  The Delaware attorney's responsibilities include evaluating the legal rights and obligations of the parties, examining title and addressing and/or removing title exceptions, reviewing documents affecting Delaware real property, conducting the settlement, and supervising the disbursement of settlement funds. In transactions involving properties in multiple jurisdictions, local counsel is sometimes engaged primarily to attend a signing, witness documents, or handle a discrete local requirement. That is not the Delaware model. The Mid-Atlantic line of authority treats the components of a Delaware real estate settlement as an integrated process rather than a collection of isolated tasks that can simply be divided among attorneys and nonlawyers. A Delaware attorney cannot simply attend the signing while a title company independently handles the substantive settlement functions. Delaware counsel must have meaningful involvement in the closing process, including title examination, document review, and supervision of the disbursement of settlement funds. The Interplay Between Delaware Counsel and Title Insurance Title insurance is also closely integrated into the Delaware settlement process. Among the settlement functions considered in Mid-Atlantic were advising purchasers concerning title insurance and issuing title insurance policies. In practice, Delaware closing counsel commonly works as an authorized issuing agent or representative of the title insurer. Delaware counsel examines or supervises the examination of title, addresses title exceptions, coordinates underwriting matters with the title company or underwriter, conducts the Delaware settlement, supervises the disbursement of settlement funds, and coordinates issuance of the title insurance policy. The title examination itself is also a substantive part of the Delaware attorney's role. In a commercial transaction, the title commitment may contain matters ranging from mortgages and judgments to easements, declarations, restrictions, reciprocal easement agreements, and other recorded documents affecting the property. Delaware counsel therefore does more than simply confirm that a title commitment has been obtained. Counsel works with the title company and transaction counsel to determine which exceptions must be satisfied, which will remain as permitted exceptions, and whether additional documentation, affirmative coverage, or underwriting approval is required before closing. For an out-of-state title company, none of this means that the title company is excluded from the transaction. National title companies regularly participate in Delaware commercial real estate transactions. It does mean that the respective roles of the title company and Delaware counsel need to be coordinated properly. A national title company may already be handling title for an entire portfolio transaction. It may have coordinated underwriting, negotiated endorsements with lender's counsel, and assembled the closing requirements for properties in several states. The presence of a Delaware property does not necessarily require abandoning that structure. Instead, Delaware counsel can work with the national title company to handle the Delaware-specific portion of the transaction. Depending upon the transaction, that coordination may include: Reviewing the Delaware title search and title commitment Examining title and addressing Delaware-specific title exceptions Coordinating with the national title company and its underwriter Obtaining underwriting approval for requested affirmative coverage and endorsements Reviewing the deed, mortgage, and other instruments affecting Delaware real property Coordinating Delaware recording requirements Confirming satisfaction of liens and other matters affecting title Reviewing transfer-tax requirements and applicable exemptions Preparing and coordinating required affidavits and other Delaware closing documents Supervising execution of the Delaware closing documents Receiving and supervising disbursement of settlement funds as required by Delaware law Coordinating recording with the appropriate county Recorder of Deeds Issuing and signing the owner's and/or lender's title insurance policies and applicable endorsements as the title insurer's authorized agent or representative The objective should not be to duplicate work already being performed by national transaction counsel or the title company. The objective is to integrate Delaware counsel into the existing closing team so that the national title company's underwriting and coordination capabilities work together with the responsibilities Delaware law assigns to Delaware counsel. Delaware's Extensive Transfer Tax and Recording Documentation Requirements Another difference that often surprises out-of-state counsel and title companies is the amount of ancillary documentation required to complete and record a Delaware deed for the real estate transaction. Delaware generally requires more transfer-tax affidavits, tax forms, and ancillary closing and recording documents than many other jurisdictions. The exact documents vary depending upon the type of transaction, the parties, the county and municipality in which the property is located, and whether a transfer-tax exemption or other special treatment is being claimed. For a conveyance, the closing package may include not only the deed but also state realty transfer tax documentation, an affidavit of residence and gain, applicable nonresident seller tax documentation, county transfer-tax affidavits, municipal transfer-tax forms, exemption affidavits, and other documents required by the applicable Recorder of Deeds or taxing authority. Delaware law generally requires a deed or other instrument conveying title to be accompanied by the required affidavit of residence and gain before the Recorder will accept it for recording, unless the transaction falls within an applicable exemption. Delaware does not require the full purchase price on the deed itself, but requires the true, full, and complete value of the transaction to appear in the accompanying affidavits. Additional requirements can exist at the county and municipal level. For example, New Castle County requires a county Realty Tax Affidavit for properties located within the county. Additional exemption documentation may be required when an exemption is claimed, and properties located within a municipality may be subject to additional municipal requirements. Financing Transactions Require Their Own Delaware-Specific Review Financing transactions also have Delaware-specific documentation and recording requirements that should be identified before closing. As a result, a deed or mortgage that is substantively acceptable to lead transaction counsel may still not constitute a complete Delaware recording package. This is one reason involving Delaware counsel early is particularly important. Determining the required ancillary documents after the parties have already executed the principal transaction documents can delay recording and, in some cases, funding. Recording Real Estate Documents in Delaware Delaware real estate documents are recorded in the county in which the property is located: New Castle, Kent, or Sussex County. Recording requirements vary among Delaware’s three counties and, where applicable, its municipalities. Although recording a deed or mortgage may appear routine, documents affecting Delaware real estate should be reviewed for compliance with applicable Delaware, county, and municipal requirements before the closing date. Depending upon the transaction, the closing team may need to address matters such as: Proper execution and acknowledgment Property descriptions Placement of required information on the instrument Parcel identification information State realty transfer tax documentation County and municipal transfer-tax affidavits Transfer-tax exemption affidavits, when applicable Seller residence and gain documentation Nonresident seller tax documentation Mortgage information Recording fees Satisfaction or release of existing liens County-specific recording requirements The parcel identification requirement itself illustrates the importance of local review. Delaware law generally prohibits a Recorder of Deeds from accepting an instrument affecting real property unless the applicable county tax-assessment parcel identification number appears conspicuously on the instrument. County recording requirements may impose additional formatting or placement requirements. Resolving these matters before documents are executed helps avoid rejected recordings and post-closing problems. Delaware's Extensive Transfer Tax and Recording Documentation Requirements  Transfer tax is another issue that should be considered early rather than discovered while preparing the closing statement. Delaware imposes a state realty transfer tax on taxable transfers of real property. Local transfer taxes may also apply depending upon the county or municipality in which the property is located. In a substantial commercial transaction, transfer taxes can represent a significant closing cost. The parties should determine the applicable tax allocation between the parties and the availability of any exemption well before closing. This becomes especially important in transactions that are more complicated than a straightforward conveyance, including entity transactions, portfolio transactions, and transactions involving affiliated entities. A transaction that does not look like a traditional deed transfer should not automatically be assumed to be exempt from Delaware realty transfer tax. The transfer-tax analysis is also connected to the documentation requirements discussed above. If the parties are claiming an exemption or taking a particular position regarding the taxable value of a transaction, the appropriate affidavits and supporting documents need to be prepared consistently with that position. Commercial real estate transactions frequently involve limited liability companies, limited partnerships, and other special-purpose entities. Delaware counsel's real estate role should therefore be distinguished from, but coordinated with, any Delaware entity law or opinion work required by the transaction. For example, assume a Delaware LLC owns a commercial property in Delaware and is refinancing the property through a national lender. The transaction may require analysis of two different categories of Delaware law. First, Delaware real estate counsel must address the Delaware property, mortgage, title, settlement, and recording issues. Second, the lender may require a Delaware legal opinion concerning the borrower's existence, good standing, power, authority, and due authorization to enter into the loan transaction. Those areas overlap, but they are not identical. Early-Stage Planning Checklist for Out-of-State Counsel and Title Companies  For out-of-state counsel or title companies handling a commercial transaction involving Delaware real estate, the following questions should be addressed early: Is Delaware real property being purchased, sold, or financed? If so, determine the required role of Delaware counsel at the beginning of the transaction. Who is handling title? Identify the title insurer, national title company, local title resources, and Delaware counsel, and establish how responsibilities will be divided. Has Delaware counsel received the title commitment and underlying documents? Do not wait until immediately before closing to begin title review. Who is preparing and reviewing the Delaware real estate documents? Determine responsibility for the deed, mortgage, and other documents affecting the Delaware property. Who will issue the title insurance policies? Coordinate the relationship between the national title company, the title insurer or underwriter, and Delaware counsel, including Delaware counsel's role in issuing and signing the policies and endorsements. Have Delaware transfer taxes and recording charges been analyzed? These amounts should be incorporated into the closing economics well before funding. Which Delaware state, county, and municipal affidavits and ancillary documents are required? Identify the required transfer-tax, residence and gain, seller tax, exemption, and recording documentation before the principal documents are circulated for execution. How will settlement funds be handled? The closing structure must account for Delaware counsel's responsibilities regarding settlement funds and disbursement. Does the transaction also require a Delaware entity-law opinion? Do not assume that engaging Delaware closing counsel automatically resolves every Delaware opinion requirement contained in the loan documents or closing checklist. Who will coordinate recording and post-closing title matters? Establish responsibility for recording the Delaware documents, obtaining the recorded instruments, satisfying post-closing requirements, and coordinating issuance of the final title policies. Conclusion: Integrating Delaware Counsel for a Smooth Closing  Delaware's attorney-closing requirement is unusual, but it does not need to make a commercial real estate transaction difficult. The key is understanding the Delaware structure early. Out-of-state counsel continues to manage the overall transaction. National title companies continue to provide the underwriting and national coordination that make multi-state transactions efficient. Lenders and borrowers can continue using their established closing processes. The Delaware component simply needs to be structured so that a Delaware-licensed attorney performs the responsibilities Delaware law assigns to Delaware counsel. That includes more than attending a signing. Delaware counsel’s role encompasses the legal components of the settlement process identified by the Delaware Supreme Court, including title examination, review of documents affecting Delaware real estate, supervision of settlement and disbursement of funds, title-insurance functions, preparation and coordination of the Delaware-specific affidavits and ancillary documents necessary to complete and record the transaction.

September 22, 2026

Landlord Representation

HUD’s Fair Housing Funding Roller Coaster Ride

Over the past several months, the U.S. Department of Housing and Urban Development (“HUD”) has initiated another significant development, this time involving the funding of private fair housing enforcement organizations. In July 2026, HUD announced sweeping changes to its Fair Housing Initiatives Program (“FHIP”), which provides funding to private nonprofit organizations. These organizations investigate housing discrimination complaints, conduct testing, refer cases for enforcement, and provide education or outreach to consumers. Historically, HUD has distributed FHIP funding among more than 100 fair housing organizations throughout the country, often ranging from approximately $75,000 to $425,000. This system allowed smaller community-based organizations to operate local testing, enforcement, investigation, education, and outreach programs. These organizations collectively handle a substantial portion of housing discrimination complaints nationwide (often serving as the first point of contact for consumers who believe they have experienced housing discrimination). Under HUD's proposed restructuring, approximately 80% of the funds appropriated by Congress would have been directed to a select few grant recipients rather than distributed through the traditional model. A coalition of 171 attorneys general collectively filed suit against HUD challenging the new funding criteria. According to recent court filings, the revised funding structure would have significantly reduced the number of organizations eligible to receive grants and potentially shifted resources away from many longstanding local and regional fair housing groups. HUD’s restructuring effort was recently paused when U.S. District Judge Myong Joun issued a decision blocking HUD's implementation of the funding overhaul. The Court concluded that HUD had not adequately explained the basis for the sweeping changes and ordered the agency to revert to the prior funding structure during the litigation. Importantly, the Court's ruling did not resolve the underlying dispute, and the broader legal challenge remained. However, in early September 2026, HUD conceded. HUD will not seek to implement the new FHEO funding initiative; its previous announcement to change funding requirements is no longer in effect, and it will not seek to implement the revised funding criteria in the future. In response, the pending lawsuit was dismissed. From a housing provider's perspective, the immediate practical impact may be more limited than some headlines suggest. The Fair Housing Act itself has not changed. The protected classes remain the same. The reasonable accommodation process remains the same. HUD, DOJ, state agencies, and private litigants retain their existing right to pursue individual claims.  What is changing is the ongoing debate about how fair housing enforcement resources should be allocated and who should receive federal funding to support those efforts.

September 22, 2026

Labor and Employment

The Future of EEO-1 Reporting: EEOC Proposal Creates Compliance Questions

Every September, HR departments at employers with 100 or more employees have turned to the same task: pulling a fourth-quarter payroll snapshot, sorting the workforce into ten job categories, coding each employee by race, ethnicity, and sex, and filing the result with the Equal Employment Opportunity Commission. The EEO-1 report has been a fixture of federal workplace compliance since 1966. By regulation, it is due no later than September 30. This September, employers are in an unusual position. The regulation still says the report is due. The agency that enforces the regulation has proposed eliminating it. And as of early September, the EEOC’s data collections page still reads “The 2024 EEO-1 Component 1 Data Collection is CLOSED,” with a promise that updates on the 2025 collection will be posted “as they become available.” The portal that would allow anyone to comply with the September 30 deadline has not opened, and no filing window has been announced. Welcome to compliance in the interregnum. What the EEOC Has Proposed On July 21, 2026, the Commission voted 2-1, along party lines, to issue a proposed rule rescinding the EEO-1 report along with its counterparts for unions (EEO-3), state and local governments (EEO-4), public school systems (EEO-5), and higher education. The proposal also would eliminate the recordkeeping and record-preservation requirements that supports those reports. The Commission's stated rationale goes further than a burden argument, though the burden numbers are real: the EEOC's own 2023 estimate put annual compliance at roughly $273 million and more than five million reporting hours. The proposal also states that the Commission has preliminarily determined the reports are inconsistent with equal employment opportunity law and potentially unconstitutional, on the theory that collecting race and sex data absent a specific allegation of discrimination sits in tension with Title VII's colorblind mandate. That framing matters. An agency that has said its own form may be unconstitutional is not likely to reverse course on the strength of comment letters. The proposal was published in the Federal Register on July 23, 2026, opening a 30-day comment period that closed on August 24, 2026. A public hearing was held on August 11, 2026. The next step is a final rule, which may or may not track the proposal and may or may not arrive before September 30, 2026. What Has Not Changed This is the part employers tend to skip past, and it is the part that matters. The regulation is still on the books. A proposed rule has no legal effect. Until a final rule is published and takes effect, 29 C.F.R. § 1602.7 continues to require covered employers to file. The EEOC may resolve the tension by opening the portal, by announcing a delay, or by finalizing the rescission. It has not done so yet, and employers should not assume that silence equals relief. The data is still required for other purposes. Even if the EEO-1 disappears tomorrow, the EEOC retains authority to request workforce demographic information in the course of a charge investigation or enforcement action. An employer that stops collecting the data because it no longer has to report it will find itself unable to respond when the same agency asks for it in a narrower, higher-stakes context. State law is unaffected. California's pay data reporting regime applies to employers with 100 or more employees and at least one California employee, and its 2026 amendments tightened storage rules and penalties. Massachusetts requires large employers to submit a copy of their federal EEO-1 to the Commonwealth. Illinois has its own equal pay certification process. None of these depend on the federal report continuing to exist, and several assume  that the underlying data will be maintained. The federal contractor threshold is already gone. The separate obligation for federal contractors with 50 to 99 employees was tied to Executive Order 11246, which was revoked in 2025. Contractors of that size filed anyway last cycle out of caution. Going forward, the 100-employee threshold is the operative one for everybody, regardless of what happens to the rescission. The Quieter Risk: Losing the Data You Need There is a tendency to view the EEO-1 purely as a reporting burden. It is also, for many employers, the only structured demographic dataset the organization maintains. That dataset does work unrelated to the EEOC. Consider the reduction in force. An adverse impact analysis, the statistical check on whether selection criteria disproportionately affect a protected group, depends on knowing the demographics of the workforce before and after. Employers that conduct that analysis do so because it is the single most effective way to identify a problem before a plaintiff's expert does. Employers that stop collecting the data lose the ability to run it. The same is true of pay equity reviews, promotion analyses, and the internal audits that support a good-faith defense when a pattern-or-practice claim arrives. The EEOC's proposal does not change the substantive law. Title VII, the ADA, GINA, and the Pregnant Workers Fairness Act remain fully in force. The proposal changes only whether the government collects the data in advance. It does not change whether the data will matter when a dispute arises. The Practical Takeaway For September, the guidance is unglamorous: Prepare to file. Have the Q4 2025 snapshot data ready in filing format. If the portal opens with a short window, as it has in recent years, employers who waited for certainty will be scrambling. Do not stop collecting. Maintain self-identification processes and keep the demographic dataset current. Store it separately from personnel files, restrict access to those with a legitimate need, and make sure it does not flow to hiring or promotion decision-makers. That last point addresses the Chair's concern directly, and it is good practice regardless of what happens to the report. Inventory your state obligations. Determine which state and local reporting or certification regimes apply to your footprint and confirm that your data collection satisfies them independently of the federal form. Watch for the final rule, and for what follows it. A final rescission may draw litigation. It may also draw a Congressional Review Act resolution, though that would require a presidential signature to take effect. Employers should expect the landscape to shift again before it settles. Sixty years is a long run for any government form. The EEO-1 may be nearing its end. But the questions it was designed to answer, about who works where and whether the numbers tell a story, are not going anywhere. Employers who treat the rescission as permission to stop asking those questions are trading a reporting obligation for a litigation one.

September 21, 2026

Intellectual Property

What In-House Counsel Needs to Know About Trademarks in M&A, Without Becoming a Specialist

Trademarks rarely drive a transaction, but they frequently complicate one. Unlike a patent portfolio that may represent a company’s core technology or a key customer contract that directly impacts revenue, trademarks often sit in the background during the early stages of a deal. They are part of the company’s infrastructure — the legal foundation supporting brand recognition, customer relationships, and market reputation. But during M&A diligence, trademarks move from the background to the spotlight. They represent a company’s goodwill and often serve as one of its most visible assets. As a result, buyers, investors, and their counsel want confidence that the brands they are acquiring are properly owned, adequately protected, and capable of supporting future growth. For in-house counsel, the challenge is not becoming a trademark specialist. It is understanding which trademark issues actually matter in a transaction, which issues can be addressed easily, and which issues could affect deal timing, leverage, valuation, or post-closing integration. The good news is that most M&A trademark problems fall into a handful of predictable categories. Ownership Matters More Than Registration Count A company may have dozens, or even hundreds, of trademark registrations. That number can look impressive during a portfolio review. But registration volume is rarely the most important issue. The first question buyers ask is simpler: Does the seller actually own the trademarks it is selling? Trademark ownership issues often arise from historical events that seemed insignificant at the time: A brand was developed by a founder before the company was formed A related entity filed the trademark application instead of the operating company A trademark was transferred as part of a prior acquisition, but the assignment was never recorded A business unit used a brand without clearly documenting ownership rights A company reorganized but failed to update ownership records These issues may not affect day-to-day operations, but they become important during diligence because ownership is fundamental to the value being transferred. A buyer is not simply acquiring a name or logo. It is acquiring the legal rights associated with that brand. In-house counsel can create significant value by ensuring that ownership records are clean, assignments are documented, and trademark ownership aligns with the company’s current corporate structure before a transaction begins. A portfolio with fewer registrations but clear ownership is often more valuable than a larger portfolio with unresolved questions. Use and Enforceability Are Closely Examined Trademark rights are not created by registration alone. Registration is important, but trademarks derive value from actual use and the ability to enforce rights against others. During diligence, buyers often look beyond registration certificates and ask practical questions: Is the company actually using the marks? Are the marks being used consistently? Are third parties using similar names? Has the company allowed unauthorized use without objection? Are licenses properly documented? Are quality-control requirements being maintained? These questions matter because trademarks can weaken over time if they are not actively managed. For example, a company may have a valuable trademark registration, but if its branding has changed significantly, the registered mark may no longer reflect how customers recognize the business. Similarly, uncontrolled licensing arrangements can create concerns about whether the company has maintained sufficient control over its brand. Enforcement history can also become relevant. A company does not need to sue every potential infringer. In fact, aggressive enforcement is not always the right business decision. But ignoring known conflicts indefinitely can create questions about the strength and value of the brand. The key issue is not whether a company has pursued every possible trademark dispute. It is whether the company has a thoughtful and consistent approach to protecting its intellectual property. Trademark Coverage Should Match the Business Another common diligence issue is a disconnect between the trademark portfolio and the company’s actual operations. Trademark registrations identify specific goods and services. Businesses, however, evolve quickly. A company may have expanded into new products, entered new markets, or changed its business model without updating its trademark strategy. Examples include: A software company registered its mark for downloadable software but now offers a broader SaaS platform A consumer brand expanded internationally but never secured protection in key markets A company acquired a brand but continued operating under it without evaluating whether protection was sufficient A service business entered new categories not covered by its existing registrations These gaps do not automatically create a transaction problem. Many can be addressed through additional filings, updated agreements, or targeted risk analysis. However, they can affect negotiations. Buyers may request additional representations, indemnities, escrow protections, or closing conditions if they believe trademark protection does not match the value of the business being acquired. The earlier these issues are identified, the more options the parties have. Not Every Trademark Issue Is a Deal Breaker One of the most important skills for in-house counsel during M&A diligence is knowing how to prioritize. Not every trademark issue requires immediate remediation. Some issues are easy to fix such as updating ownership records, filing additional applications, cleaning up documentation, or formalizing existing licenses. Some issues can simply be disclosed including a pending application, a manageable third-party conflict, or a registration gap in a non-core market. A smaller number of issues may require more significant solutions such as ownership disputes, threats to core brands, unresolved infringement claims, and gaps affecting a major revenue stream. The goal is not to eliminate every imperfection before a deal begins. Few companies have a flawless trademark portfolio. The goal is to understand the business significance of each issue and respond proportionately. Overreacting to minor issues can unnecessarily slow a transaction. Ignoring meaningful issues can create greater problems later. Effective counsel helps the business distinguish between the two. Preparing Without Overengineering Strong trademark preparation before an acquisition does not require an unnecessarily complicated process. It requires awareness and consistency. Periodic trademark portfolio reviews can identify ownership gaps and protection issues before they appear in diligence. Internal procedures can ensure new brands are cleared and protected before significant investments are made. Basic documentation practices can prevent questions about who owns important assets. Most importantly, in-house counsel should avoid waiting until a transaction is underway to understand the company’s trademark position. A buyer’s diligence request should not be the first time anyone asks: What trademarks do we own? Who owns them? Where are they protected? Are they being used consistently? Are there known risks? When those questions have already been answered, diligence becomes faster and more predictable. Trademarks Support Transactions When They Are Understandable and Defensible Trademarks do not need to be perfect to support an M&A transaction. They do, however, need to be understandable, defensible, and aligned with the business. For in-house counsel, the objective is not to become a trademark expert. It is to recognize the issues that affect deal value and timing, identify risks early, and ensure that the company can clearly explain the strength and limitations of its brand portfolio. The companies that handle trademark diligence most effectively are not necessarily those with the largest number of registrations. They are the companies that understand what they own, why it matters, and how those rights support the business they are building.

September 21, 2026

Landlord Representation

Baltimore City Rental Property Notice Rules: Avoid Costly Legal Disputes

For landlords and tenants in Baltimore City, understanding notice requirements is essential to protecting legal rights and avoiding costly disputes. Both Maryland law and Baltimore City regulations establish specific timelines that must be followed before actions such as lease termination, rent increases, or eviction proceedings can move forward. Knowing and complying with these requirements can help both parties resolve issues efficiently and stay in compliance with the law. When Rent Goes Unpaid: Failure to Pay Rent Notices When a tenant fails to pay rent, landlords must generally provide a written 10-day notice before filing a Failure to Pay Rent action in court. This notice serves as an opportunity for the tenant to address the outstanding balance before legal proceedings begin. Staying Beyond the Lease: Tenant Holdover Requirements A holdover tenancy occurs when a tenant remains in possession of a rental property after the lease term has expired. In these situations, landlords are generally required to provide at least 60 days' advance written notice before initiating legal action. Providing proper notice helps ensure that both parties have adequate time to prepare for the end of the tenancy and avoid unnecessary disputes. Ending a Month-to-Month Tenancy For month-to-month rental agreements, either the landlord or the tenant must typically provide at least 60 days' written notice before the end of the rental period. This notice requirement allows both parties sufficient time to make alternative arrangements, whether that involves finding new housing or securing a new tenant. Addressing Lease Violations Before Taking Action When a tenant violates a lease provision other than nonpayment of rent, landlords are generally required to provide a written 30-day notice detailing the alleged violation. Depending on the circumstances and the terms of the lease, tenants may also be given an opportunity to correct, or "cure," the issue before further action is taken. Clear communication and timely notice can often prevent minor issues from escalating into formal legal disputes. A Tenant's Responsibility: Providing Notice Before Moving Out Tenants should also be aware of their own notice obligations when planning to vacate a rental property. Failure to provide the required notice may result in additional rent liability or other financial obligations under the lease. Reviewing lease terms well in advance of a planned move can help tenants avoid unexpected costs. Why Proper Notice Matters Notice requirements can vary depending on the type of tenancy, lease provisions, and the specific facts of a situation. For that reason, both landlords and tenants should carefully review applicable laws and consult legal counsel when questions arise. Proper notice is often the first and most important step toward resolving rental disputes legally, efficiently, and with minimal expense. Understanding these requirements can help protect everyone involved and reduce the risk of costly litigation.

September 18, 2026

Commercial Litigation

Understanding Motions to Dismiss: Why They Are Not the Easy Escape Many Defendants Hope For

No one wants to be a defendant in a lawsuit. This is especially so when you feel like the claims against you are inaccurate and/or spurious. As a result, if you've been sued, one of your first questions may be: "Can we get this case thrown out right away?" It's a natural reaction. Litigation is expensive, time-consuming, and stressful. The idea of ending a lawsuit before spending money on document exchanges, depositions, court appearances, and even a trial is appealing to anyone facing legal action. That is where a motion to dismiss comes in.  A motion to dismiss asks the court to end a lawsuit or at least dispense with individual claims at a very early stage, often before any evidence has been exchanged between the parties. While that sounds straightforward, motions to dismiss are often much harder to win than most people expect.  Understanding why can help you make a more informed decision about whether pursuing one makes sense in your case. What Is a Motion to Dismiss? Put simply, a motion to dismiss is a formal application asking the court to decide that, even if everything alleged in the lawsuit were true, the plaintiff still lacks a valid legal claim. At this early stage of a case, the court generally is not deciding who is telling the truth. Instead, the court is determining whether what the plaintiff has asserted in the complaint could, even if proven later, legally support a claim. This can be one of the most confusing aspects of litigation for defendants.  It is easy to read a complaint and immediately conclude that it contains and/or identify exaggerations, inaccuracies, or outright falsehoods. A defendant considering a motion to dismiss might understandably ask: "Why would a court ever assume any of this is true?" The answer is that, with a few limited exceptions, it legally has to in order to apply applicable law governing motions to dismiss.  In doing so, it is often creating a legal fiction solely for the purpose of deciding the motion to dismiss and is not deciding whether the allegations are actually true. It merely, temporarily, accepts them as true to decide whether the lawsuit is legally sufficient to move forward. If the answer is no—if even accepting all the allegations as true, there is still no claim—the court can dismiss a case right away, before any discovery, on the ground that there is no legally supportable claim. Those limited exceptions (that the court does not have to accept as true) are bald allegations that amount to conclusions only and are really fact-free; allegations that are conclusively refuted by documentary evidence.  For instance, if the complaint simply accuses a defendant of committing fraud but does not say how, the Court need not accept it as true. Similarly, if there is a document or record that shows, in fact, that the defendant did not commit fraud, the Court does not need to accept that allegation as true.  Therefore, in addition to the above, where the claims are refuted by documentary evidence or not supported by sufficient facts, the court can also dismiss a case right away, before any discovery, on the ground that there is no legally supportable claim. Why Motions to Dismiss Are Difficult to Win Motions to dismiss are extremely difficult to win.  This is because the court must create the legal fiction discussed above. It looks at a complaint in the light most favorable to the person who filed it, and therefore, the burden on the person seeking dismissal is significant. To win, the defendant typically must show that the plaintiff would not be entitled to relief under any reasonable interpretation of the alleged facts, or that records definitively undermine their claim. In other words, the defendant must show that the lawsuit is legally defective from the start as it is written. That is a high bar. Many defendants believe they are right on the facts and have evidence to prove it. While they may very well be correct, since a motion to dismiss comes into play before evidence is exchanged, if there are any issues that cannot be definitively decided, the case must move on to the discovery phase. As evidence usually comes into play later in the case, after discovery has occurred, unless it is available to the court on the motion to dismiss, it cannot be considered in dismissing the case. As a result, cases that ultimately fail may survive an early motion to dismiss. Some of the most spurious cases require discovery to show their lack of merit.  Many losing cases can defeat motions to dismiss if they reach the minimal bar of plausibly stating a claim. What Happens If the Motion Is Denied? One of the most important points for clients to understand is that losing a motion to dismiss does not mean losing the case. It simply means the lawsuit will continue. The movant will answer the complaint. The parties then move into discovery, where they exchange documents, take depositions, and gather evidence. The defendant still has the opportunity to challenge the plaintiff's claims later through a motion for summary judgment or at trial. A denial means only that the court believes the plaintiff has alleged enough facts for the case to proceed. It is not a determination that the plaintiff is correct. The Cost-Benefit Analysis A motion to dismiss necessarily creates additional legal fees at the beginning of a case; therefore, every client should be educated on to the risks and strategic aims of submitting this permissive filing. Preparing the motion often requires detailed legal research, drafting extensive papers, reviewing opposition papers, preparing a reply, and often appearing in court for oral argument.  If the motion is denied, the case generally returns to the same stage it would have reached if no motion had been filed. For that reason, clients should view a motion to dismiss as an investment with both potential rewards and risks. The reward is obvious: a successful motion could end the lawsuit early and save substantial litigation costs. The risk is that the client may spend money pursuing the motion only to end up proceeding to discovery anyway. Does Winning End the Case Forever? Not necessarily. In some situations, a successful dismissal allows the plaintiff to revise the complaint and try again. The court may determine that the lawsuit, as written, is inadequate and give the plaintiff an opportunity to fix the problem. In other cases, the court dismisses the claims permanently. This is often referred to as a dismissal "with prejudice." When that occurs, the plaintiff generally cannot bring the same claims again, although an appeal may still be possible. The likelihood of a permanent dismissal depends on the facts of the case, the legal issues involved, and the court handling the matter.  A client should include this in its risk-reward analysis discussed above in when deciding to make such a motion. So When Does a Motion to Dismiss Make Sense? Despite the challenges, motions to dismiss remain valuable tools in many cases. They can be appropriate when there is a strong legal defect in the complaint, when key claims are clearly barred by law, or when eliminating claims early could significantly reduce litigation costs and exposure. In some situations, even filing the motion can help clarify the issues in dispute and force the plaintiff to identify the legal basis for the case. The key is understanding that a motion to dismiss is not a guaranteed shortcut. It is a strategic decision that should be weighed carefully against the costs, risks, and potential benefits. The Bottom Line Many people enter litigation hoping there is a quick way to make the lawsuit disappear. Occasionally, a motion to dismiss provides exactly that result. More often, however, the case proceeds beyond the initial stage and into discovery. The decision to file a motion to dismiss should therefore be made with realistic expectations. The client should go in with eyes wide open. It can be a powerful tool when the circumstances are right, but it is not a magic wand. The most important thing is to understand both the opportunities and the risks before making the investment. An informed client is better positioned to make sound decisions, manage litigation costs, and develop an effective overall case strategy.

September 17, 2026

What Dolly Can Teach Us About Caring for the Caregiver

Dolly Parton died late last month at age 80 following what her family called a “brief battle” with cancer. The worldwide, heartfelt tributes that followed focused, rightly, on her legacy not only in music, but in stories of her generosity and kindness spanning over her sixty years in the public eye. There is no doubt that Dolly will be remembered as one of the most beloved figures in American culture. Tucked inside the coverage of her extraordinary life, however, was her final year, which told a much quieter story. That story deserves its own moment of attention, not because it explains her death, but because it is a pattern that so many caregivers will recognize in themselves and may have contributed to it. The Caregiver Ignoring Her Own Health After her husband, Carl Dean, died in March 2025, Dolly spoke openly about the toll caregiving had taken on her. She shared candidly that she had been dealing with health issues of her own, which she gladly set aside while Carl was ill. In fact, following his death, she described her state as "worn down and worn out," reflecting on her grief and the toll the years of caretaking that preceded it. Dolly was not a woman without resources; she had access to the best medical care money could buy, a devoted circle of family and friends, a strong faith, and a public platform to talk about what she was going through. And still, by her own account, she put her health on the back burner and chose not to share the incredible toll caregiving was taking on her while she was living it. I think that is also a part of Dolly’s legacy, and a topic worth sitting with: if someone with every advantage can lose track of her own well-being while caring for a loved one, what does that suggest about the millions of us doing the same thing with far fewer resources, far less support, and far less room to admit they are struggling? The Pattern Isn't Rare — It's the Norm Caregiver self-neglect is well-documented: it is not anecdotal. Statistics show that nearly two in five caregivers have at least two chronic diseases of their own. Family caregivers routinely delay their own doctor's appointments, skip screenings, ignore symptoms, and allow their own chronic conditions to go unmanaged all the while managing someone else's illness, medications, and activities of daily living. The costs of ignoring one’s own care do not always end dramatically. Sometimes it is a persistent cough that is only managed by copious amounts of lozenges, or blood pressure that remains high and untreated, bone-tired exhaustion that is never named as anything more serious than "tired."  In fact, Dolly’s own language, “worn down, worn out,” is exactly how so many caregivers describe themselves, usually downplaying, always in passing, and too often without seeking help for it. What This Isn't To be clear about what this piece is not saying: there's no basis for claiming that caregiving caused Dolly’s cancer or her subsequent death. Her family cited a brief illness, and drawing a straight line from caretaking to cancer is, no doubt, a distortion. What can be said, though, is that there are millions of those of us who live it, and indeed, Dolly said it herself: she set her own needs aside for a long stretch of time while caring for someone she loved. That care and devotion left her depleted in ways she was still wrangling with when she died last week. The Lesson If you are currently a caregiver for a spouse, a parent, or a child, the takeaway should not be the ways in which you fail to care for your own health. Rather, it is permission. Permission to keep your own appointments. Permission to admit the fatigue that you are experiencing is worth mentioning to a doctor, instead of just pushing through. Permission to ask for help before you are "worn down and worn out," rather than after. Dolly Parton spent her career dazzling us with her beautiful voice, her songwriting prowess, sharing other people's stories, and giving generously to causes far beyond herself — literacy, LGBTQIA advocacy, vaccine research, disaster relief - just to name a few. After Carl died, she was honest about the one place she had not been as generous: with herself. That honesty is worth more than a cautionary tale about Dolly specifically. It should be a nudge to the rest of us, quietly doing the same thing right now, and telling ourselves that it is ok to put our own well-being aside. It probably isn't. And it's worth checking.

September 16, 2026

Commercial Litigation

Before You File in Tax Court: Should Your Client Take the IRS to a Jury?

When the IRS proposes a substantial tax liability, many taxpayers and their advisers instinctively assume that the next step is the United States Tax Court. That is often the correct forum. Tax Court lets taxpayers challenge a deficiency without first paying and also offers access to judges who deal with federal tax law every day. But Tax Court is not the only option. In an appropriate case, a taxpayer may instead pay the disputed liability, file an administrative refund claim, and bring a refund suit in federal district court. Unlike Tax Court, a federal district court can provide something potentially significant: a trial before a local jury. That alternative may be especially important when the taxpayer’s dispute falls within a category that the IRS has publicly targeted and in which the Tax Court has developed a substantial body of government-favorable precedent. Captive-insurance arrangements, Puerto Rico tax-incentive cases, conservation easements, listed transactions, and transactions of interest are prominent examples. Sometimes the Forum Is as Important as the Tax Issue I often say that jury trials are, at least in part, popularity contests — and it is hard to lose a popularity contest to the IRS. A jury may be particularly receptive when a taxpayer can present credible witnesses, contemporaneous business records, and a logical explanation for the transaction under examination. When the IRS’s position depends on portraying a legitimate business, its owners, or its advisers as abusive or dishonest, a local jury may provide a valuable opportunity to test that characterization. This does not mean that a jury will disregard the law or automatically side with the taxpayer. The taxpayer must still establish the elements necessary to recover a refund, and the district judge will decide the governing legal questions. But when the outcome depends heavily on facts, credibility, and business reality, the identity of the factfinder matters. The Concern Is Greatest in Heavily Targeted Categories Every tax case should be decided on its own facts. In practice, however, prior decisions inevitably shape how later cases are evaluated. That becomes particularly significant when the Tax Court has repeatedly considered a particular type of transaction and consistently ruled in the government’s favor. Over time, the disputed category can acquire a negative identity of its own. A taxpayer may then face not only the evidence in its particular case, but also an existing body of decisions involving other taxpayers, different advisers, different documents, and different facts. Captive-Insurance Arrangements The Tax Court has decided a series of micro-captive cases in favor of the government. Those decisions have developed a body of precedent addressing risk distribution, actuarial pricing, claims administration, circular cash flows, risk pools, and whether the arrangements constitute insurance in the commonly accepted sense. Many of the arrangements addressed in those opinions had significant factual weaknesses. Nevertheless, the accumulation of adverse decisions can make it difficult for a taxpayer with materially different facts to separate its case from the broader category. Once “micro-captive” or “§ 831(b)” appear in the case, the taxpayer may find itself defending not only its own insurance program but the reputation of the industry as a whole. Puerto Rico Tax-Incentive Cases The IRS has established a compliance campaign directed at taxpayers claiming benefits under Puerto Rico Acts 20 and 22, now incorporated into Act 60. The campaign addresses whether taxpayers were bona fide residents of Puerto Rico, whether income was properly sourced to Puerto Rico, and whether particular structures improperly shifted income away from the United States. The IRS has committed examination resources, technical guidance, data analysis, and other enforcement tools to these cases. Its published materials identify perceived noncompliance involving both residency and income sourcing. As these cases move from examination into litigation, taxpayers may confront a government narrative that treats the Puerto Rico incentive structure itself with suspicion. Yet the critical questions — where the taxpayer lived, where services were performed, how the business operated, and where the income was earned — are often highly factual. A jury may evaluate those questions through testimony, business records, travel records, communications, and other contemporaneous evidence. Conservation Easements Conservation-easement litigation has likewise produced a substantial body of government-favorable decisions. Many cases involve technical deed requirements, valuation disputes, partnership structures, promotional materials, and questions concerning the taxpayer’s charitable intent. The IRS has publicly identified abusive syndicated conservation easements as an enforcement priority. That designation can influence how the transaction is perceived before the taxpayer’s particular facts are examined. A jury will not cure a defective deed or disregard an applicable statutory requirement. But where the dispute turns on valuation, intent, reasonable reliance, or the credibility of competing experts, jury review may offer a materially different forum. Listed Transactions and Transactions of Interest The same concern applies more broadly to listed transactions and transactions of interest. An IRS designation creates reporting obligations and potentially significant penalties, but it does not establish that every taxpayer participating in the transaction acted improperly. Nor does it prove that the IRS’s proposed tax treatment is correct in every case. Nevertheless, the designation itself can become a central feature of the dispute. The taxpayer may be viewed as a participant in an abusive strategy before the court considers the specific facts, legal advice, business purposes, and economic consequences of the transaction. In those circumstances, presenting the case to a jury without the same history of category-specific Tax Court decisions may be strategically important. Tax Court and District Court Offer Different Paths A taxpayer who receives a statutory notice of deficiency may petition the Tax Court without paying the proposed liability. The case is decided by a Tax Court judge, not a jury. Alternatively, the taxpayer may allow the liability to be assessed, pay the amount required to pursue a refund action, file a proper administrative claim for refund, and, after satisfying the applicable procedural requirements, bring suit in federal district court. Federal law gives district courts jurisdiction over qualifying federal tax-refund suits, and either party may request a jury trial. The taxpayer may also bring a refund suit in the United States Court of Federal Claims, but that court does not provide a jury. When jury review is part of the litigation strategy, federal district court is therefore the relevant alternative. The Principal Drawback: Payment Usually Comes First The most obvious advantage of Tax Court is that the taxpayer ordinarily does not have to pay the asserted deficiency before obtaining judicial review. A district-court refund suit generally works in the opposite order. Under the Supreme Court’s full-payment rule, the taxpayer ordinarily must pay the assessed tax before filing suit to recover it. For a large deficiency, that can create a substantial financial burden and may make the district-court route impractical. There are important exceptions for certain divisible taxes and penalties. Employment taxes, trust-fund recovery penalties, and some assessable penalties may permit refund litigation after payment of only the divisible portion required by the applicable statute. Internal Revenue Code § 6703 also provides a special procedure for challenging certain promoter penalties, including penalties under § 6700. The payment requirement must therefore be evaluated based on the particular tax or penalty. CPAs should not assume either that the entire assessment must always be paid or that a partial payment will necessarily be sufficient. Where the taxpayer has access to the necessary funds, or where a divisible assessment permits a more limited payment, the strategic value of a jury may justify the cost of pursuing the refund route. Ankner Demonstrates the Value of Escaping a Category-Based Narrative The potential value of a district-court jury was illustrated in Ankner v. United States, where I served as lead trial counsel for a captive-insurance manager and its chief executive officer in their successful challenge to approximately $4 million in promoter penalties imposed under § 6700. Although Ankner involved promoter penalties rather than a direct challenge to captive-insurance deductions, the government’s theory depended on its characterization of the underlying micro-captive arrangements. The verdict represented the first courtroom victory for a taxpayer in the § 831(b) micro-captive arena and, to date, remains the only taxpayer victory — standing apart from an otherwise uninterrupted series of government victories in Tax Court. After making the payment required to invoke the special statutory refund procedure, the taxpayers challenged the penalties in the United States District Court for the Middle District of Florida. At trial, the government could not prevail merely by characterizing the underlying arrangements as micro-captives or relying on adverse decisions involving other taxpayers. It was required to prove the specific statutory elements of § 6700 based on the evidence involving these taxpayers. The jury heard the witnesses, reviewed the documents, and considered what the taxpayers had actually said, what they knew, and whether the statements identified by the government were materially false. The jury rejected the government’s position and found that the taxpayers were not liable for the penalties. The lesson is not that juries will always rule for taxpayers. It is that a jury can require the parties to move beyond the label attached to a transaction and return the focus to the particular witnesses, documents, representations, and business facts in the case. Although the burden of proof in Ankner was governed by the provisions applicable to § 6700 penalties, the broader lesson applies to other disputes: an IRS enforcement designation or a series of adverse cases involving other taxpayers should not replace individualized consideration of the evidence. The Refund Claim Should Be Prepared With Litigation in Mind Choosing district court requires more than paying the assessment. Internal Revenue Code § 7422 generally requires the taxpayer to file an administrative refund claim before bringing suit. The claim should identify each ground on which the refund is sought and provide sufficient facts to advise the IRS of its basis. The refund claim should therefore be prepared as the foundation for potential litigation. Counsel should consider the legal theories, relevant tax periods, supporting documents, potential witnesses, and expert issues before the claim is filed. A strong refund claim may also improve the prospects for resolving the dispute administratively. It demonstrates that the taxpayer has developed the case, understands the evidentiary requirements, and is prepared to proceed if the IRS does not allow the refund. The Forum Decision Must Be Made Early The choice between Tax Court and district court should not be postponed until the eve of trial. When the IRS issues a statutory notice of deficiency, the taxpayer ordinarily has 90 days to file a Tax Court petition. Filing that petition generally forecloses a later district-court refund action involving the same tax and period. The taxpayer and its advisers should therefore evaluate the competing forums before the petition is filed. If the taxpayer selects the refund route, the administrative claim and the limitations period for filing suit must also be monitored carefully. Once the IRS mails a formal notice of disallowance, Internal Revenue Code § 6532(a) generally provides two years to file suit. Continuing to negotiate with the IRS or pursuing an administrative appeal does not, by itself, extend that deadline. When CPAs Should Raise the Issue CPAs are often in the best position to recognize cases that may benefit from district-court review. They understand the client’s business, know the quality of the records, and can evaluate whether the taxpayer and other witnesses can credibly explain the disputed transaction. The forum question deserves consideration when: The IRS appears to be applying an industrywide enforcement position rather than focusing on the taxpayer’s individual facts The dispute turns heavily on credibility, intent, valuation, reasonable reliance, or business purpose The client has strong witnesses and contemporaneous documentation The client’s business explanation can be communicated clearly to non-tax specialists Payment is financially possible, or a divisible-tax procedure may reduce the required payment The deadline for filing a Tax Court petition is approaching These factors do not mean district court is necessarily the better forum. A dispute involving a narrow statutory interpretation or an issue driven principally by specialized tax doctrine may be better suited to a Tax Court judge. But a fact-intensive case with a strong record and an unfavorable category-based narrative should prompt a deliberate forum analysis. A CPA does not need to determine the proper forum. The CPA needs to recognize when the choice deserves a conversation with litigation counsel before the available options narrow. Do Not Treat Tax Court as the Automatic Choice Tax Court remains an important and frequently appropriate forum. Its prepayment jurisdiction and specialized judges offer substantial advantages. But when a taxpayer has materially better facts than the cases that preceded it, the ability to present those facts to a local jury may offer meaningful strategic value. The question should be considered before Tax Court becomes the automatic, and potentially irrevocable, choice. As Ankner demonstrates, moving beyond the IRS’s label and focusing the factfinder on the taxpayer’s actual evidence can change the outcome.

September 15, 2026

Intellectual Property

Lost in 1957, Litigated in 2026: The Copyright Risks Hidden in Older Creative Works

Puerto Rican singer-songwriter Roy Brown spent decades setting the poems of celebrated nationalist poet Juan Antonio Corretjer to music. After Corretjer died in 1985, one of his heirs assigned the poems to Latin American Music Company (LAMCO), a music publisher that registered the works with the Copyright Office in 2000 and began claiming royalties on Brown's recordings. Brown sued, LAMCO countersued, and the parties have been in federal court in Puerto Rico for over twenty years across multiple rounds of litigation. The most recent chapter closed on August 12, when Judge María Antongiorgi-Jordán of the District of Puerto Rico issued a ruling on cross-motions for summary judgment – one which should be on the radar of anyone whose work involves older creative material. The dispute over twelve of the thirteen poems turned on the Copyright Act of 1909, which governed all creative works published before January 1, 1978. Under that statute, publishing a work without a proper copyright notice was fatal to copyright protection, as the work entered the public domain immediately, with no opportunity to fix the mistake. LAMCO and Corretjer's daughter, Consuelo, tried to avoid this result by invoking the "limited publication" doctrine, which provides that sharing copies only with a specifically select group, for a limited purpose, and without allowing further distribution does not trigger the notice requirement. Corretjer was a politically persecuted dissident under FBI surveillance, and the claimants argued he kept his manuscripts within only a trusted circle of allies. They supported that theory with an affidavit from an administrator who had no personal knowledge of any of the events at issue, but the administrator’s description of Corretjer, a political poet determined to reach as many sympathizers and spread his political ideas, undercut the claim that he was carefully restricting who could receive his work. The court granted summary judgment for Brown on all twelve poems. The thirteenth, "Boricua en la Luna" (a piece that functions as something close to a second national anthem for Puerto Rico), survived as a question for the jury. Brown claims Corretjer personally handed him the manuscript at a 1976 concert in Ponce and told him to set it to music. Under First Circuit law, this kind of exchange can establish an oral implied license. Even so, Brown is not out of the woods: issues regarding scope of permission remain, and an informal instruction to "set it to music" may not necessarily authorize decades of commercial recordings, printed lyrics, and album packaging. For clients in the music and arts space, this case illustrates two risks. Pre-1978 creative works are governed by a legal framework that offered no safety net for a missing copyright notice. If the notice was absent when the work was first published, the copyright was lost, and no subsequent registration could claw back the rights. Anyone acquiring or asserting rights in older material needs to examine the original publication history before assuming protection exists. The case also highlights the danger of relying on informal permissions. A verbal authorization granted in a concert hall fifty years ago, with no surviving witness and a principal who has since passed away, may end up before a jury rather than settling the question cleanly, and even a favorable verdict may leave the scope of those rights unresolved.

September 14, 2026

Family Law

Electronic Surveillance Abuse in Family Law Cases

Technology has made it easier than ever to communicate, share information, and stay connected. Unfortunately, it has also created new opportunities for a spouse or partner to improperly monitor the other. In family law cases, electronic surveillance can raise serious concerns involving privacy, safety, credibility, and the well-being of children. Electronic surveillance may take many forms. Allegations can involve unauthorized access to emails or social media accounts, monitoring text messages, tracking a person's location through a device or vehicle, or the use of technology to monitor communications. In some cases, a party may not realize that their activity is being monitored until evidence of the surveillance emerges during a divorce or custody proceeding. These allegations can have significant legal consequences. Depending on the circumstances and applicable law, information obtained through unauthorized surveillance may raise questions about how the evidence was obtained and whether it may be used in court. Surveillance allegations may also become relevant to broader issues in a custody case, particularly when the conduct suggests an effort to intimidate, control, or interfere with the other parent's privacy or safety. Electronic surveillance can also create discovery issues. A party may seek records concerning devices, accounts, applications, location data, or other electronically stored information. At the same time, attorneys must carefully consider the privacy implications and the legal limits concerning the collection and use of that information. The important lesson is that technology is an inherent part of family law, not a separate consideration. As electronic devices and digital accounts become increasingly integrated into everyday life, disputes over monitoring and surveillance are likely to become more common. Anyone who believes they are being electronically monitored, or who is accused of engaging in surveillance, should seek legal advice before accessing, copying, deleting, or distributing potentially relevant digital information.

September 11, 2026

Family Law

Could Your AI Searches Become Evidence in a Family Law Case? 

As artificial intelligence becomes part of everyday life, a new family law discovery issue is beginning to emerge. What happens when attorneys seek a party’s AI search history? People are increasingly using AI tools to ask questions they might previously have entered into an internet search engine or discussed privately with a friend. In a contentious custody case, however, a search such as “how can I keep my children from my spouse?” could potentially take on a very different significance when viewed in the context of litigation. Family law attorneys may begin seeking AI prompts, conversation histories, and other records during discovery or through subpoenas, particularly when those records could shed light on a party’s intentions, state of mind, or conduct. A series of searches concerning hiding assets, restricting parenting time, monitoring a spouse, or keeping children away from the other parent could become relevant evidence depending on the facts of the case and applicable discovery rules. Although traditional rules of discovery and evidence still apply, the use of AI presents a new and evolving area of uncertainty. Courts and practitioners may have to grapple with questions about the relevance, discoverability, authenticity, privacy, and admissibility of AI-generated conversations and search histories. Adding to the uncertainty, whether an AI provider retains the requested information, and whether it can or will disclose that information in response to a subpoena or other legal process, may vary significantly depending on the platform, its policies, and the circumstances of the request. Nevertheless, the practical lesson for family law litigants is important: AI searches should not necessarily be treated as consequence-free conversations. Just as texts, emails, social-media activity, and internet searches can become relevant in litigation, AI interactions may increasingly become another source of electronically stored information. For attorneys, this creates a new area of discovery to consider. For clients, it creates a new reason to think carefully about what is entered into an AI platform, particularly when a divorce, custody dispute, or other family law proceeding is anticipated. As AI becomes more integrated into daily life, family law discovery will likely have to evolve with it.

September 11, 2026

Labor and Employment

New York Joins Growing List of States Requiring Employee Access to Personnel Records

After Governor Kathy Hochul signed S.3460 into law on September 9, 2026, New York is now one of 18 states that  require employers to provide employees access to their personnel records. The statute will apply in both public and private sectors employees and former employees, effective November 8, 2026. Expanded Definition of “Personnel Record,” Record Retention Requirement The new law defines "personnel record" as records that are used, have been used, or may be used in connection with decisions concerning an employee's qualifications for employment, promotion, transfer, compensation, or discipline. The definition also extends to records maintained by third-party vendors acting on behalf of an employer. As a result, employers may need to evaluate not only the contents of formal personnel files, but also records maintained through payroll providers, HR platforms, and other personnel administration services. Employers will also have to determine whether manager working notes, internal communications regarding employee performance, draft evaluations, or portions of investigative files are subject to disclosure. Although the law excludes certain information that would constitute an “unwarranted invasion” of another individual's privacy, it provides limited guidance on how that exclusion should operate in practice when employers are balancing employee access rights against confidentiality concerns. Employers must retain complete personnel records during an employee's employment and for three years following separation. When Access and Notice Requirements are Triggered The statute has a straightforward requirement for scenarios where an employee requests access to their file. Upon receiving a written request, employers will be required to furnish personnel records within five business days at no cost to the employee. Employees are entitled to review their personnel records twice in a calendar year. But the statute creates an unclear requirement for scenarios where an employer adds items into the personnel file that could “negatively affect” the employee. Specifically, if there is any item added to the personnel file that could “negatively affect the employee's qualification for employment, promotion, transfer, additional compensation or the possibility that the employee will be subject to disciplinary action,” it must notify employees within 10 days. In its current form, the law does not define what constitutes “negative” information, which will likely create substantial compliance questions. For example, it is unclear whether routine coaching memoranda, attendance records, customer complaints, investigatory materials, manager notes, performance improvement plans, or preliminary performance concerns trigger the notice obligation. Similarly, employers may struggle to determine whether information becomes "negative" only after a disciplinary decision has been made or whether notice is required whenever a document could potentially influence a future employment decision. Right to Respond to Information in File The new law allows employees to submit written statements contesting information contained in their personnel records. If the employer and employee cannot agree on whether the challenged information should be removed from the personnel file, the employer will be required to include the employee’s contention in their personnel file. The statute also provides employees with an avenue to expunge contested information through the “judicial process” with relatively little guidance regarding how disputes involving subjective performance evaluations or disputed factual conclusions should be resolved. Government Entity in Charge of Enforcing Statute The New York State Attorney General’s Office is responsible for enforcing this new law. Violations of the statute may result in civil penalties ranging from $500 to $2,500. The law also prohibits retaliation against employees who exercise their rights under the statute. As a result of the ambiguities surrounding what information constitutes a “personnel record,” when information added to a personnel file “negatively affects” an employee, and the particular process an employee needs to follow in order to successfully “expunge” an item in their personnel record, the New York State Attorney General’s Office may weigh in to provide guidance on how it plans to enforce this law. In the meantime, employers will be required to make judgment calls regarding the scope of the notice requirement until courts or regulators provide guidance. Conclusion With the November 8, 2026, effective date rapidly approaching, employers should begin reviewing personnel record practices, assessing the records maintained by third-party vendors, updating retention protocols, and developing procedures for responding to employee requests within the statute's five-business-day deadline. Employers should also consider training human resources personnel and managers regarding the law's notice requirements, particularly given the uncertainty surrounding what information may be considered "negative." While the law clearly reflects New York's intent to expand employee access to personnel information, many of its most consequential provisions remain open to interpretation. As employers prepare for implementation, the greatest compliance challenge may not be producing personnel records, but determining when the statute requires notice of information that could be viewed as having a negative impact on an employee's career. Until additional guidance emerges, employers should take a cautious approach and closely monitor developments surrounding this significant change to New York employment law.

September 11, 2026

Business

OIG Advisory Opinion 26-12 Approves Concierge Program Warranty for Surgical Outcomes

On May 22, 2026, the Office of Inspector General ("OIG") issued Advisory Opinion 26-12, concluding that a proposed warranty program offered by an orthopedic surgery provider would not generate prohibited remuneration under either the Federal Anti-Kickback Statute ("AKS") or the Beneficiary Inducements Civil Monetary Penalty ("CMP") provisions. Accordingly, OIG stated that it would not impose administrative sanctions in connection with the arrangement. The opinion provides important guidance regarding the application of the AKS warranty safe harbor to innovative service delivery models. The Proposed Arrangement The Requestor, an orthopedic surgery provider, offers patients an optional concierge program that includes post-operative recovery support services and products for one (1) year following surgery. These services include wellness coaching, educational support, nutritional programs, digital health monitoring tools, and recovery-related products. The provider certified that none of these concierge services are reimbursable by Medicare, Medicaid, or commercial insurance, although the underlying surgical procedures may be covered by Federal health care programs. Patients who elect to participate pay a separate concierge fee and execute a membership agreement before surgery. Under the proposed arrangement, the provider would warrant that a patient's substantial compliance with the concierge program would result in the patient not requiring revision surgery within two (2) years of the initial procedure. If the patient nevertheless required revision surgery during that period, the provider would refund the concierge fees paid in connection with the original surgery. The provider would not refund medical expenses, cover revision surgery costs, or provide any additional remuneration. Nor would the patient be required to return to the provider for the revision procedure. Anti-Kickback Statute Analysis OIG recognized that the arrangement potentially implicates the AKS because the offer of a refund could make the provider more attractive to prospective patients seeking surgeries that are reimbursable by Federal health care programs. As a result, OIG examined whether the arrangement satisfied the regulatory safe harbor for warranties found at 42 C.F.R. § 1001.952(g). The warranty safe harbor protects certain written undertakings to refund, repair, replace, or provide other remedial action when an item, bundle of items, or related services fail to meet specified performance standards. OIG concluded that the proposed concierge fee refund met the regulatory definition of a warranty because: The commitment was memorialized in a written membership agreement The warranty formed part of the bargain between the provider and the patient The provider agreed to take remedial action in the form of a refund The refund would be triggered by the failure of the concierge program and related services to achieve the promised outcome of avoiding revision surgery within two years OIG further determined that the arrangement satisfied the applicable conditions of the warranty safe harbor. Among other things, the provider certified that it would accurately disclose and document any refund, require patients to provide information to government authorities upon request, and refrain from conditioning the warranty on exclusive use of the provider or minimum purchase requirements. Because the arrangement fit squarely within the warranty safe harbor, OIG concluded that it would not constitute prohibited remuneration under the AKS. Beneficiary Inducements Civil Monetary Penalties Analysis OIG likewise found no violation of the Beneficiary Inducements Civil Monetary Penalties (CMP). Although the refund offer could arguably influence a Medicare or Medicaid beneficiary's selection of a provider, the CMP's definition of remuneration excludes practices that are permissible under an AKS safe harbor. Having determined that the proposed arrangement qualified for protection under the warranty safe harbor, OIG concluded that the arrangement likewise posed no risk under the Beneficiary Inducements CMP. Key Compliance Considerations Several facts were central to OIG's favorable determination: The concierge services were separately purchased at fair market value The refund applied only to the concierge fees paid by the patient and not to medical, hospital, or surgical expenses Patients were not required to use the provider for any future procedure, including revision surgery The provider did not condition the warranty on exclusive use arrangements or minimum purchasing commitments Appropriate reporting, documentation, and disclosure requirements were incorporated into the membership agreement Conclusions Advisory Opinion 26-12 demonstrates OIG's willingness to recognize properly structured outcome-based warranty programs tied to non-covered services that satisfy the warranty safe harbor. The opinion may be particularly relevant to providers developing concierge, care coordination, recovery support, or other value-added patient programs. At the same time, OIG emphasized that its approval was limited to the specific facts presented. Notably, the agency distinguished the proposed arrangement from the provision of free concierge services or other free benefits to patients. OIG reiterated its longstanding concerns that free items or services connected to federally reimbursable care may present significant fraud and abuse risks and would not necessarily qualify for safe harbor protection. While advisory opinions bind only the requesting party, Advisory Opinion 26-12 offers a useful roadmap for providers seeking to design patient-centered warranty programs that reward outcomes without running afoul of the AKS or Beneficiary Inducements CMP. Proper structuring, fair market value pricing, careful documentation, and strict adherence to the warranty safe harbor remain essential to achieving a favorable compliance result.

September 9, 2026

Mergers and Acquisitions

Can AI Buy a Company? What Buyers Need to Know About AI’s Role and Limitations in M&A Transactions

Artificial intelligence is changing just about everything in our lives, including the merger and acquisition (M&A) process. AI-powered tools can add tremendous efficiency to the acquisition process by reviewing large volumes of documents, summarizing contracts, organizing diligence materials, and identifying provisions that might otherwise take hours to find. While these efficiencies can accelerate the M&A process, speed should not be mistaken for judgment. An acquisition is not just about collecting and summarizing information. Buyers must determine what that information means for the value of the business, the structure of the transaction, and their willingness to proceed. AI can be a very helpful tool, but it cannot replace the wisdom and judgment that comes with experienced M&A counsel. The better question is not whether AI can buy a company. It is how buyers and their advisors can effectively use AI tools without losing sight of the human judgment that ultimately protects the deal. AI Can Review Documents, But It Cannot Assess the Buyer’s Risk  During due diligence, AI tools can be very useful in taking over time consuming tasks such as: Summarizing contracts Locating change-of-control or assignment provisions Comparing similar agreements Flagging unusual or inconsistent terms Organizing documents by subject matter Identifying potentially missing information AI’s speed here is particularly helpful in transactions involving hundreds or thousands of contracts. That said, identifying a provision is only the beginning of the analysis. Suppose an AI tool finds change-of-control language in several agreements. The real questions are: Which agreements are critical to the business? Will consent be required before closing? Could the counterparty terminate or renegotiate? How would the loss of that relationship affect revenue, operations, or valuation? The same language can create very different levels of risk depending on whether it appears in a minor vendor agreement or a contract with the target’s largest customer. AI may locate the provision, but it cannot reliably determine how much risk it creates for this particular buyer in this particular transaction. That requires a human’s understanding of the buyer’s objectives, the target’s business, the industry, and the broader structure of the deal. AI Finds Issues, But Lawyers Determine Materiality Due diligence often produces a long list of potential concerns, including incomplete employment agreements, gaps in intellectual property ownership, inconsistent customer contracts, regulatory deficiencies, or unresolved disputes. AI can help identify these issues, but it can also identify so many potential concerns that the buyer ends up with more information than clarity. This is where experienced deal counsel can help the buyer separate meaningful risks from background noise. Not every issue warrants the same response, and many times, matters can be corrected before closing. Others may justify a purchase-price adjustment, escrow, or holdback. Certain risks may require a special indemnity, a closing condition or a change to the transaction structure. A sufficiently serious issue may cause the buyer to reconsider the deal altogether. But that kind of analysis depends on context, and determining how the pieces fit together remains a judgment-intensive exercise. AI Does Not Negotiate the Deal Every acquisition involves compromise. Even when the parties agree on price, they must negotiate representations and warranties, indemnification obligations, liability caps, escrows, closing conditions, earnouts, and numerous other provisions that allocate risk between the buyer and seller. AI can propose language based on prior agreements or common market formulations. It may also help compare drafts and identify changes. But it is critical to note that it cannot be entrusted to manage the negotiation itself. That requires an understanding of what the other side wants, where the buyer has leverage, and which issues are worth pressing. It also requires the ability to recognize when a proposed solution creates a new problem elsewhere in the agreement. Sometimes the strongest response is to hold firm. Other times, the better strategy is to address the concern through a price adjustment, special indemnity, post-closing covenant or alternative structure. A good deal lawyer does more than argue over language. They help the parties find a workable path to closing while protecting the client’s most important interests. There is also a strong relationship component to every transaction. Many buyers need the seller, management team, or key employees to remain involved after closing, but an unnecessarily aggressive negotiation can damage the working relationship before the buyer takes control of the company. AI cannot read the room, understand personalities, or know when winning a drafting point could hurt the larger transaction. AI Cannot Identify Every Question the Buyer Should Be Asking AI is generally most effective when it has the right documents and receives the right inputs and instructions. The difficulty is that buyers do not always know what is missing, or even what they should be asking in the first place. Experienced M&A counsel can recognize patterns from prior transactions. They know which diligence requests are likely to uncover problems, which industries present specialized risks, and which seemingly routine answers require follow-up. A contract summary will not help if a significant agreement was never uploaded to the data room. A review of the target’s intellectual property schedule may not reveal that a former contractor created critical software without signing an assignment. Employment records may look complete until someone asks how workers are classified, compensated, or managed in practice. AI analyzes only the information it receives; whereas deal counsel knows when the available information does not tell the entire story. This ability to identify the unknown is particularly important for buyers entering a new industry or making their first acquisition. An experienced attorney can anticipate where issues tend to arise and tailor the diligence process to the buyer, the target, and the transaction. AI Outputs Still Need to Be Verified AI-generated summaries can sound authoritative even when they are incomplete or incorrect. A tool may overlook an exception, misinterpret a defined term, miss the interaction between multiple provisions, or reach a legal conclusion that the underlying language does not support. In an M&A transaction, even a small error can have significant consequences. A missed consent requirement could delay closing. An incomplete summary of a customer agreement could distort the buyer’s view of recurring revenue. A mistaken interpretation of an indemnification provision could leave the buyer with less protection than expected. AI should be treated as an analytical tool, not as the final reviewer or decision-maker. Its work must be checked against the underlying documents and evaluated by professionals who understand the legal and business consequences. Buyers and their counsel must also consider how sensitive deal information is handled. Confidential financial records, customer data, employee information, and trade secrets should not be entered into an AI platform without understanding the tool’s security, retention, and privacy practices. Using AI the Right Way in an Acquisition The strongest acquisition teams will not ignore AI, but importantly, they will not treat it as a substitute for experienced advisors. AI is most valuable when it handles repetitive, time-intensive tasks and allows deal counsel to spend more time on higher-value work. Buyers should have a firm understanding of: Which AI tools their advisors are using How confidential information is protected Whether AI-generated findings are independently verified How identified issues are prioritized and escalated Which decisions remain subject to human legal and business judgment The goal in using these tools to help deal teams ask better questions, find issues sooner, and make better-informed decisions. AI may help a buyer move through diligence more efficiently, but it cannot decide whether a risk is acceptable, negotiate the right protection, or determine whether the deal still makes strategic sense. Those decisions will always require the experience, context, and judgment legal counsel and advisors bring to the table.

September 8, 2026

Bankruptcy

Celsius Litigation: Framework for Valuing Digital Assets in Avoidance Actions

In a recent decision addressing a question raised by the crypto winter, the United States Bankruptcy Court for the Southern District of New York outlined a framework for valuing digital assets recovered through bankruptcy avoidance actions. The ruling is noteworthy because it confronts an issue that traditional bankruptcy jurisprudence has rarely faced: volatile, highly liquid assets that can dramatically increase or decrease in value in a short period of time. As Judge Glenn observed, digital assets differ from traditional property because they are easily transferable, actively traded, and subject to significant market fluctuations. In the Celsius litigation, the court had to determine: “1. Is the Litigation Administrator entitled to recover (a) the allegedly transferred digital assets if they remain in the applicable Defendant’s possession, custody or control or, alternatively, (b) their value? 2. If the Litigation Administrator is entitled to recover the value of any allegedly transferred digital assets, what value is the Litigation Administrator entitled to recover if the allegedly transferred digital assets: i. Have appreciated since they were transferred from Celsius? ii. Have depreciated since they were transferred from Celsius?” In re Celsius Network, LLC, No. 22-10964-MG, 2026 WL 1999187, at *1 (Bankr. S.D.N.Y. July 10, 2026) The litigation administrator claimed that the appropriate measure of damages is either (1) the return of the digital asset or (2) the market price of the asset if the asset appreciated. In the event the transferred asset has depreciated, the litigation administrator claimed that the court should award the market price of the digital asset on the date of the transfer. Section 550 of the Bankruptcy Code allows a trustee or estate representative to recover either the property transferred or, if the court so orders, the value of that property. The Bankruptcy Code, however, does not specify how value should be measured when the property fluctuates in price after the transfer. Judge Glenn therefore turned to the statute's underlying purpose: restore the estate to the position it would have occupied had the transfer never occurred. The Court's Three-Part Framework Judge Glenn ultimately adopted a practical framework designed to balance three competing concerns: Making the estate whole Preventing preference defendants from profiting from avoidable transfers Avoiding unfair or potentially limitless liability resulting from cryptocurrency market volatility The court held: For depreciating assets, the estate may recover the transfer-date value, regardless of whether the defendant still holds the asset. For appreciating assets still held by the defendant, the estate may recover the asset itself. For appreciating assets that have been sold, the estate may recover the sale price obtained by the defendant. The defendant bears the burden of proving both that the asset was sold and the amount for which it was sold. If the defendant cannot establish those facts, the estate may recover the judgment-date value. This framework represents an effort to tailor traditional avoidance principles to the realities of cryptocurrency markets. The Decision Regarding Depreciating Assets is Based on Well-Established Precedent Judge Glenn's analysis began with what he viewed as the easier question: assets that declined in value after transfer. The court emphasized that the purpose of § 550 is restorative rather than punitive. If a cryptocurrency worth $100,000 at the time of transfer later falls to $10,000, requiring the estate to accept only the depreciated asset or its current value would leave the estate substantially worse off than if the transfer had never occurred. In effect, the bankruptcy estate would bear the entire market loss. Relying on prior fraudulent transfer and avoidance precedent, Judge Glenn concluded that transfer-date value is the proper measure for depreciating property because it restores the estate to the financial position it would have occupied absent the transfer. The court reasoned that allowing only recovery of the current value would undermine the statute's remedial purpose. Why the Court Rejected Judgment-Date Value for Appreciating Crypto The more difficult issue involved assets that appreciated after transfer. The litigation administrator argued that appreciation should inure to the benefit of the estate because, had the transfer never occurred, the estate would have retained the asset and potentially realized the upside. The argument found support in cases involving real estate and other appreciating property. Judge Glenn, however, distinguished digital assets from many traditional forms of property. He noted that cryptocurrency is extraordinarily liquid, highly volatile, and can be sold almost instantaneously. Moreover, unlike real estate, many transferees no longer possess the specific assets that were transferred. The court was particularly concerned that imposing judgment-date valuation on a defendant who sold cryptocurrency years earlier could create what it described as "essentially limitless liability." A customer who withdrew and sold Bitcoin long ago could be exposed to damages tied to market increases occurring long after the asset had been disposed of. The court concluded that such a result would be inequitable. Judge Glenn also observed that there was no evidence that Celsius would necessarily have held the assets through the period of appreciation. The company may have sold, rebalanced, hedged, or otherwise deployed the assets. Awarding judgment-date appreciation therefore risked providing the estate with a windfall rather than merely restoring it. The Court's Middle Ground Rather than adopting either transfer-date value or full judgment-date value as a universal rule, Judge Glenn crafted a middle-ground approach. If a defendant still possesses an appreciating digital asset, the estate may recover the asset itself and thereby receive the benefit of appreciation. That result mirrors what would have occurred had the transfer never happened. If the defendant sold the asset, however, recovery is limited to the benefit actually realized through the sale. The estate receives the sale proceeds, including any appreciation captured by the defendant, but not speculative gains that accrued after disposition. In the court's view, this approach honors Congressional concern regarding a "wait-and-see" strategy by transferees while avoiding exposure to unlimited liability based solely on subsequent market movements. Practical Takeaways for Digital Asset Holders Judge Glenn's decision represents one of the first comprehensive attempts to address how cryptocurrency should be valued in bankruptcy avoidance actions. Rather than applying a rigid valuation date, the court adopted a flexible framework that distinguishes between appreciating and depreciating assets and considers whether the cryptocurrency remains in the transferee's possession. The ruling seeks to restore the estate and avoid imposing limitless liability driven solely by crypto market volatility. For digital asset holders, the message is clear: maintain thorough records, understand the risks of later-avoidable transfers, and recognize that post-transfer appreciation may not always belong to the party currently holding the coins.

August 31, 2026

Commercial Litigation

DExit: How Texas is Building a Corporate Alternative to Delaware

Through business court reform, corporate governance legislation, and the creation of a national stock exchange, Texas is making a deliberate bid to compete with Delaware as America's preferred corporate domicile. Texas is a lot of things, but subtle is rarely one of them. And there is certainly nothing subtle about Texas's recent efforts to attract businesses and capital to the Lone Star State. The latest evidence can be found in a term that has increasingly entered corporate nomenclature: DExit. Short for "Delaware Exit," DExit refers to the growing trend of companies reconsidering Delaware as their state of incorporation. Much of the public discussion surrounding DExit has focused on a handful of high-profile corporate relocations and reincorporations. That focus, however, risks missing the larger story. For more than a century, Delaware has occupied a singular place in corporate America. That dominance is remarkable when one considers Delaware's size. The entire State of Delaware could fit within the greater Houston metropolitan area and still leave room for a few Buc-ee's locations. Yet this geographically tiny state became the legal home of many of America's largest corporations by offering something few jurisdictions could match: a sophisticated body of corporate law and a specialized judiciary capable of resolving corporate disputes with predictability. Texas has spent the last several years studying that playbook. Recent amendments to the Texas Business Organizations Code, the creation of the Texas Business Court and Fifteenth Court of Appeals, and the launch of the Texas Stock Exchange suggest that Texas is no longer content merely to attract a company's regional office or even its corporate headquarters. Texas now wants the company's legal domicile as well. Whether Texas ultimately succeeds remains to be seen. Delaware's advantages remain substantial. But for the first time in decades, a serious challenger appears to be emerging. Rewriting the Corporate Rulebook The clearest evidence of Texas's ambitions appear in Senate Bill 29 and the legislature's recent amendments to the Texas Business Organizations Code (TBOC). The legislature was not particularly coy about what it hoped to accomplish. State Senator Bryan Hughes described Delaware as a jurisdiction in which many companies had become "shackled by a burdensome Delaware legal establishment dominated by activist judges and special interest groups" and stated that the legislation would help bring American enterprise and jobs to Texas.1 The bill's legislative history described Texas's goal as becoming the "corporate law capital of America."2 Amended TBOC § 21.218 narrows shareholder inspection rights by requiring a shareholder to hold shares for at least six months or own at least 5% of the corporation's outstanding shares before demanding access to books and records. The statute also limits inspections to requests related to a shareholder's economic interest in the corporation and generally restricts access to certain categories of electronic communications. That restriction on electronic communications is particularly significant. Emails, text messages, and other electronic communications are among the most voluminous and expensive categories of information for a company to collect, review, and produce upon a books and records request. The legislature also codified the business judgment rule through TBOC § 21.419, establishing a statutory presumption that directors and officers acted in good faith, on an informed basis, and in the best interests of the corporation. Senator Hughes stated that the change would allow Texas businesses to "confidently deploy capital" by providing greater certainty to corporate decision-makers.3  Finally, new TBOC § 21.373 permits qualifying corporations to adopt heightened requirements for shareholder proposals, including minimum ownership thresholds, holding periods, and proxy solicitation requirements. Reasonable minds may disagree on the wisdom of these changes, but their purpose is clear. Texas is actively reshaping its corporate-governance framework to make itself more attractive to corporate managers and directors considering where to incorporate. Building a Texas Version of the Court of Chancery Corporate lawyers have never chosen Delaware solely because of its statutes. Delaware's true advantage has long been its Court of Chancery and the extensive body of precedent developed through decades of specialized corporate litigation. Texas’s response is the Texas Business Court. Operational since September 2024, the court has jurisdiction over certain complex business disputes, including corporate-governance matters and significant commercial transactions. For many claims, Business Court jurisdiction generally requires an amount in controversy exceeding $5 million. Appeals proceed directly to the newly established Fifteenth Court of Appeals, creating a centralized path for the development of Texas business law.4 Early results suggest the court is attracting substantial use. During its first year, the Texas Business Court received 185 filings, including 145 corporate-governance cases. Judges issued more than 680 orders, conducted more than 270 hearings and conferences, and produced 42 written opinions.5 Those numbers matter. Delaware's dominance did not emerge overnight. It developed because companies, lawyers, and judges repeatedly chose a singular and specialized forum for business disputes, which resulted in a predictable body of case law. Texas appears to be attempting a similar process. Ringing the Opening Bell The most ambitious piece of Texas's strategy may be the Texas Stock Exchange (TXSE).  A state can attract incorporations through favorable laws. It can improve predictability through specialized courts. But creating a genuine alternative corporate ecosystem requires access to capital markets. The Texas Stock Exchange received SEC approval in September 2025 and completed its rollout into full production trading in July 2026. It is Texas’s first fully integrated national securities exchange.6 Its launch was more than symbolic. TXSE began trading with more than 50 member-firms and described its opening as the broadest day-one participation of any exchange launch in half a century. TXSE leadership has stated that the exchange was designed to provide “real competition for primary listings for the first time in decades."7 In August 2026, Reuters reported that TXSE secured its first primary listings, an early milestone in that effort, and noted that the venture is backed by prominent financial institutions and investors, including BlackRock, Citadel Securities, and Charles Schwab.8 TXSE plans to begin facilitating initial public offerings in 2027, which would mark its next major step toward becoming a full-service competitor to the established New York exchanges.9 No one should expect TXSE to depose the New York Stock Exchange or Nasdaq anytime soon. That is not the point. The significance of TXSE lies in what it represents. Texas is no longer content to attract headquarters. It is building the infrastructure that supports public companies after they arrive. The message seems to be that if a company is willing to move its charter to Texas and litigate its disputes in a Texas business court, Texas would also like it to ring the opening bell here. Viewed alongside the TBOC amendments and Business Court reforms, the exchange is another step in Texas's broader effort to become the legal home of major American businesses. Texas Makes Its Move Delaware remains the dominant corporate domicile in America. Its position rests on more than a century of corporate law precedent and the predictability that comes with it. No state can replicate that overnight. Texas, however, enters this competition from a position of strength. In 2026, Texas surpassed California as the state with the largest number of Fortune 500 headquarters. The state is now home to 57 Fortune 500 companies with a combined $2.8 trillion in annual revenue.10  For decades, Texas competed on cost, taxes, and population growth. Today, it is competing on corporate governance and capital as well. Whether DExit ultimately becomes a wave or merely a footnote in corporate history remains to be seen. What is already clear is that Texas has made a deliberate decision to challenge Delaware's dominance. The coming years will determine whether businesses embrace that challenge. Texas, however, is no longer content to be where companies do business. It wants to be where they choose to call home. 1 Press Release, Office of Senator Bryan Hughes, Senator Bryan Hughes Files Groundbreaking Bill to Transform Texas Corporate Law (Feb. 27, 2025). 2 S.B. 29, 89th Leg., Reg. Sess. (Tex. 2025), legislative history and bill analyses; Tex. Bus. Orgs. Code §§ 21.218, 21.373, 21.419. 3 Note 1, supra. 4 H.B. 19, 88th Leg., Reg. Sess. (Tex. 2023), legislative history; S.B. 1045, 88th Leg., Reg. Sess. (Tex. 2023), legislative history; Tex. Gov't Code ch. 25A and § 22.2151. 5 Office of Court Administration, The Business Court of Texas, Annual Report FY 2025. 6 Office of the Governor, Governor Abbott Marks Successful Trading Launch of Texas Stock Exchange (July 31, 2026). 7 Texas Stock Exchange, Texas Stock Exchange Celebrates Successful Launch of Trading (July 31, 2026). 8 Reuters, Texas Stock Exchange Lands First Primary Listings in Bid to Carve Out Market Turf (Aug. 18, 2026; updated Aug. 19, 2026). 9 Eric Revell, Texas Stock Exchange Officially Goes Live to Rival NYSE and Nasdaq, Fox Business (July 31, 2026). 10 Fortune Media, Amazon Claims No. 1 Spot on the Fortune 500 (June 3, 2026); Office of the Governor, Texas Leads With Most Fortune 500 Headquarters (June 3, 2026).

August 31, 2026

Labor and Employment

When the Algorithm Recommends Termination: Employer Liability for AI in Hiring, Discipline, and Performance Management

Employers have moved quickly to bring artificial intelligence into parts of the employment relationship that used to depend entirely on human judgment. Applicant tracking systems now score resumes before a recruiter sees them. Scheduling and productivity platforms flag employees as underperforming based on keystroke counts, call times, or delivery windows. Performance management tools generate draft write-ups, and in some organizations, recommend whether an employee should be coached, placed on a performance improvement plan, or terminated. The efficiency case for these tools is obvious. The legal exposure they create is less obvious, and it is growing. The core problem is not that AI is involved in employment decisions. It is that AI outputs are increasingly being treated as conclusions rather than inputs, and that shift changes how those decisions look in a deposition, an EEOC position statement, or a jury instruction. The Employer Cannot Delegate the Decision Title VII, the ADA, the ADEA, and their state and local counterparts all impose liability on the employer, not on the software the employer purchased. An employer cannot defend a discrimination claim by pointing to a vendor’s algorithm and arguing that a machine, not a person, made the call. Regulators have already made this point explicit. The EEOC has stated that employers remain responsible for adverse impact caused by algorithmic decision-making tools even when a third-party vendor built and maintains the tool. Several state laws, including New York City’s Local Law 144 governing automated employment decision tools, impose independent audit and notice obligations directly on the employer using the tool. That means the familiar advice to document a legitimate, nondiscriminatory reason for an adverse action now has a second layer. It is not enough that AI flagged the employee. The employer must show that a human reviewed the flag, understood why it was generated, and exercised independent judgment before acting on it. A termination file that says only “system-generated performance score of 2.1, employee terminated” is a much harder file to defend than one that documents what a manager actually observed and considered. Disparate Impact Hides Inside the Model Disparate treatment claims require some evidence of intent, but disparate impact claims do not, and AI-driven employment tools are a natural fit for disparate impact theories. A scoring model trained on historical performance or attrition data can quietly reproduce whatever bias existed in that history. A resume screening tool can learn to penalize employment gaps, certain schools, or language patterns that correlate with protected characteristics even though the model was never told to consider race, sex, age, or disability directly. The practical exposure here is twofold. First, if a plaintiff’s counsel obtains statistical evidence that an AI tool selects or rejects candidates or employees at meaningfully different rates across protected groups, the employer will need validation data showing the tool is job related and consistent with business necessity, the same standard that has applied to any selection device since Griggs v. Duke Power Co. Vendors rarely provide this validation data unprompted, and employers frequently discover during litigation that they never asked for it. Second, an employer that never tested its own tool for adverse impact will have a difficult time arguing it acted reasonably, even where no discriminatory intent existed. Ignorance of how the tool works is not a defense; in a disparate impact case, it can be the plaintiff's best evidence that no one was minding the store. Discovery Now Reaches Further Than the Personnel File AI adoption expands what is discoverable in an employment case well beyond the traditional personnel file. Prompts entered by HR or supervisors, model outputs and confidence scores, version histories showing when a scoring model was retrained, and internal communications about why an alert was or was not acted on are all now fair game. Plaintiffs’ counsel is increasingly requesting this material specifically, because it can show not just that an adverse outcome occurred, but what the company knew and when. This creates a preservation problem many employers have not yet solved. Some platforms overwrite scoring history as new data comes in or retain outputs only briefly by default. If a company has no policy governing retention of AI-generated employment data, it may find itself unable to produce records that plaintiffs assume exist, inviting a spoliation argument, or it may find that the only surviving record is an unfavorable one that a human reviewer never actually relied upon but that now looks, in hindsight, like the smoking gun. Practical Governance Closes the Gap None of this counsels against using AI in employment decisions. It counsels against using it without a governance structure built for the way these tools will actually be examined after the fact. At a minimum, employers should be able to show that a person with real authority to disagree reviewed any AI-generated recommendation before it became a personnel action, that the tool has been validated or at least tested for disparate impact on a periodic basis, that managers are trained to document their own independent reasoning rather than simply citing the tool's output, and that retention practices for AI-generated data are deliberate rather than accidental. Where a jurisdiction imposes specific notice, bias audit, or disclosure obligations on automated employment decision tools, those requirements need to be built into the rollout, not addressed after a candidate or employee complains. The employers best positioned when one of these tools produces a bad outcome are the ones who can show, with contemporaneous documentation, that a human being was accountable for the decision the whole way through. The tool can inform that judgment. It cannot substitute for it, and the law has no intention of letting it try.

August 27, 2026

Labor and Employment

NLRB General Counsel Signals Another Round of Precedent Reversals: What Employers Need to Know About GC Memo 26-04

On August 26, 2026, NLRB General Counsel Crystal S. Carey issued Memorandum GC 26-04, "Further Guidance Regarding General Counsel Priorities." This is a follow-up to her earlier guidance in GC Memo 26-03 on shifting enforcement priorities, and it's a useful roadmap for any private employer trying to anticipate where federal labor law is heading over the next year or two. The headline for clients: No changes have been made yet, but many of the precedents adopted by the NLRB during the Biden administration may change over the next months or possibly years while the Trump administration remains in office. A General Counsel memo does not change what the National Labor Relations Board has held is unlawful. It's a statement of prosecutorial priorities and the legal positions the GC's office intends to argue in pending and future cases. But GC memos are a reliable early-warning system for where Board law is going, and this one specifies, case by case, which Biden-era Board precedents the current GC is actively trying to unwind. The list includes essentially all of the new or revised interpretations of the National Labor Relations Act issued during the Biden administration. If your organization has non-union operations, unionized operations, or is navigating an organizing campaign, several of these items are worth putting on your radar now. GC Carey opens by reporting that the agency has resolved 9,247 pending cases since she took office, more than a 50% reduction in the backlog she inherited. Significantly, the regional offices are not required to route cases involving these targeted issues through the Division of Advice. Instead, they will keep investigating and prosecuting under existing Board law while the GC pursues these arguments through litigation. Positions Already Being Argued in Pending Cases These are precedents the GC's office has already asked the Board or an administrative law judge to overturn in specific, named cases: Severance agreements and confidentiality/non-disparagement clauses.  In Valley Radiology, P.A., the GC is arguing to overrule McLaren Macomb (2023) — the decision that made broad confidentiality and non-disparagement provisions in severance agreements presumptively unlawful. If the Board agrees, employers will regain more latitude to include standard confidentiality and non-disparagement language in severance and separation agreements without automatically committing an unfair labor practice. Consent orders. In the Amazon cases, the GC is asking the Board to overturn Metro Health/Hospital Metropolitano Rio Piedras (2024), which limited the Board's discretion to approve consent orders (settlement mechanisms) over the General Counsel's objection. A reversal would restore more flexibility for administrative law judges to approve settlements even without GC sign-off. Work rules and handbook policies. In Honeywell International, the GC is arguing to overturn Stericycle (2023), the standard that made facially neutral work rules unlawful if they could "chill" protected activity from the perspective of an economically dependent employee reading them in the worst reasonable light. A rollback would ease pressure on standard handbook provisions — think confidentiality, social media, and civility policies — that many employers rewrote to comply with Stericycle. "Captive audience" meetings. In UPS Supply Chain Solutions, the GC has moved to withdraw exceptions in favor of overturning the current Amazon.com Services (2024) rule, which bars employers from requiring employees to attend meetings where the employer expresses its views on unionization. She's urging a return to the decades-old Babcock & Wilcox standard, which permitted mandatory captive-audience meetings. This is a significant one for any employer that uses employee meetings as part of a union-avoidance or communication strategy. Statements predicting the impact of unionization. In the same UPS case, GC Carey has explicitly broken from her predecessor's position under Starbucks/Siren Retail (2024) and will instead urge the Board to reinstate Tri-Cast (1985), a more permissive standard for employer statements predicting what might happen to wages, benefits, or working conditions if a union is voted in. Dress codes. In Starbucks Corporation, the GC argues against the employee-protective standard from Tesla (2022) and asks the Board to reinstate Wal-Mart Stores (2019), which gave employers more room to enforce dress code and uniform policies — including logo and pin restrictions — without running afoul of Section 7. Waiver of the right to bargain. In HPC Industrial Group, the GC has flagged Endurance Environmental Solutions (2024) for reversal and intends to push for a return to the MV Transportation (2019) "contract coverage" standard, which gives more weight to broad management-rights clauses as a basis for unilaterally changing terms and conditions of employment without additional bargaining. Positions the GC Intends to Raise When the Right Case Comes Along These are precedents GC Carey has flagged as targets but hasn't yet had a procedural vehicle to formally argue. Employers should watch for these to surface in future litigation: Bargaining orders without an election. (Cemex Construction Materials Pacific, 2023): The GC wants the Board to abandon the Cemex framework — which allows a bargaining order to issue without a union election in some circumstances — and return to the pre-Cemex combination of Gissel Packing (1969) and Linden Lumber (1971), which is generally viewed as more protective of an employer's right to insist on a secret-ballot election. Duty to bargain before changing existing terms. (Wendt Corporation and Tecnocap, both 2023): These decisions currently require bargaining over changes even where there's longstanding past practice guiding the action. The GC views this as slowing down routine contract administration and wants it revisited. Union dues checkoff after contract expiration. (Valley Hospital Medical Center, 2022): The GC wants to return to the 1962 Bethlehem Steel rule, under which an employer's obligation to deduct union dues from paychecks ends automatically when the collective bargaining agreement (and its checkoff clause) expires — rather than continuing post-expiration as Valley Hospital currently requires. Objector fee disclosures. (UFCW Local 700/Kroger, 2014): The GC intends to argue that unions should have to disclose more detailed information to dues objectors than Kroger currently requires under Beck and California Saw & Knife Works. Protected concerted activity and workplace conduct. (Miller Plastic Products and Lion Elastomers II, both 2023): The GC has specifically called out Lion Elastomers II as extending protection to employee conduct — including conduct that would otherwise be prohibitable — that is only tenuously connected to activity protected under the Act. This case is already pending on remand before the Board. Enhanced/"make whole" remedies. (Thryv, 2022): The GC wants the Board to reconsider the expanded consequential-damages remedy adopted in Thryv, noting that courts have repeatedly cut back on it and that it hasn't yet been tested through a full compliance proceeding. What This Means for Your Organization Every item above requires the Board to actually rule in the GC's favor. National Labor Relations Act will likely stay in flux for months to come. Practical Takeaways (For Now) If your severance agreements, handbook policies, or dress code provisions have been revised in the last two to three years specifically to comply with McLaren Macomb, Stericycle, or Tesla, it may be worth flagging those provisions for a fresh look once the Board rules. This may not mean revising them immediately, but it may help you determine in advance what revisions may be permitted or advisable. If you would rely on mandatory employee meetings as part of your communications strategy during organizing activity, the captive-audience question is one to watch closely, since a reversal would restore an employer tool that's currently off the table, except in a few states that have outlawed captive-audience meetings under state law. If you're a unionized employer with a broad management-rights clause, the outcome in the waiver-of-bargaining cases could materially affect how much unilateral flexibility you have when administering the contract.

August 27, 2026

Construction

Best Practices When Terminating for Cause a Downstream Contractor/Subcontractor

Terminating for cause a downstream contractor (or subcontractor) is considered the “nuclear option” when handling breaches of contract. Terminating for cause usually increases the risks and likelihood of litigation. Frequently, by the time the terminating party contacts the lawyer, it has already made the decision to terminate and wants the lawyer to effectuate the termination as quickly as possible. But a snap termination may cause compound problems. Instead of a quick termination, best practice is to follow a methodical, well-documented approach. Follow the Contract Documents Most contracts outline a process for declaring breach and terminating the contract. Generally, these steps must be followed. Some contracts identify with specific precision the types of breaches that allow for termination versus other remedies. The governing law (e.g., which state’s law applies) can have significant effect on the righteousness of a termination. Some states rigidly require all processes, notices, and terms set forth in the contract termination clauses to be satisfied prior to termination. Other states may allow exceptions to the drawn-out termination process, affording quick termination that shortcuts contractual notice clauses, depending on the circumstances. Still, whether a contract can be terminated more quickly than set forth in the contract is open to interpretation, and terminating more quickly than the contract strictly requires increases the risk of wrongful termination. Meanwhile, if the contractual processes have been followed, it significantly reduces the risk of a wrongful termination. Thus, as a general rule of thumb, following the contract processes for declaring breach and termination is a good start. Best Practice is to Issue a Notice to Cure Most contracts that outline a process for termination also require issuing a notice to cure prior to termination. As previously stated, it is best to follow the contractual requirements. Even if the contract does not require a notice to cure, it is typically best practice to still issue a notice to cure. There are two main reasons why this is recommended. First, if the default party cures the breach, then, perhaps there is no need to terminate, because the work has been brought “back on track.”  Generally, forcing the defaulting party to cure the breach at its own cost is less expensive than terminating and fronting the costs to bring in another trade to finish or cure the work. Second, when proving that the termination was justified, typically it must be demonstrated that the defaulting party was in “material breach” of the contract. If the breach pertains to a critical component of the work, and the defaulting party fails to cure it after a proper notice, that is very strong proof that the defaulting party was in material breach and cannot perform. Thus, the termination for cause is more likely to be adjudged as righteous and justified after a failed cure opportunity. Meanwhile, if no opportunity to cure was provided, the defaulting party can argue that it would have cured the breach. If the breach could have been cured, that is strong evidence that the breach was not material (it was fixable). Thus, a notice to cure is typically the “other foot dropping” that proves the default could not be cured and therefore the defaulting party was in material breach. Some states require a notice to cure to be issued prior to termination for cause. Lastly, sometimes the breach has already, previously been cured by the defaulting party. Occasionally, an irritated higher-tier party will provide a lengthy list of transgressions and reasons for termination, but all of them are old, stale, and already cured. Generally, it is problematic to terminate for cause, if the reason for the termination has already been cured. Usually, terminating for cause requires the defaulting party to be in current, uncured breach at the time of termination. If terminating a party for yesteryear’s transgressions, then, you are not technically terminating for breach of contract (it was already cured); instead, you are terminating because you are still angry about it. But that is not a justified basis for termination under the law. It is an uncured (or uncurable) material breach that justifies termination, not a subjective opinion that the party was incompetent due to past issues that are of no current moment. Document the Breach of Contract, the Remediation, and the Costs/Losses When terminating a defaulting party, it is important to document breach. Photographs, daily logs/reports, notices to cure, and meeting minutes should corroborate and prove the breach.  Documentation of the redesign or remediation work should be well maintained, including annotated sketches or drawings to explain the details of the breach and remediation. Likewise, clear, segregated cost tracking proving the specific additional costs for remediation and cure of the issue should be maintained. Also, best practice is to maintain documentation of the curative work to show and explain the steps taken to cure the issue. Often, the curative work itself speaks volumes as to what the problem was. Preserve Evidence, Allow Access to Evidence, and Avoid Spoliation Obviously, the evidence of breach, notice, termination, and the remediation work should be preserved. Relatedly, it is best to provide notice of the pending remediation work and allow the terminated party access to the site for a last inspection of the issue prior to the remediation work occurring. This is because, once the remediation work commences, the evidence of breach will inherently be destroyed and manipulated. Sometimes the terminated party will dispute the evidence, and argue that if it had been allowed the opportunity to inspect the defect, it would have been able to prove that the work was in fact satisfactory or a less expensive cure could have been utilized. The best approach is to allow the terminated party to access the site to inspect the work and observe the remediation work. The terminated party cannot interfere with the work or project, of course, but providing reasonable access for inspection (and sometimes destructive testing) is the best practice. Lastly, sometimes, if allowed to inspect prior to the final termination, the defaulting party might present analysis or evidence to change minds about the course for remediation. Ensure that All Interested Parties Have Been Given Notice Sometimes there is a reason to give notice of the termination to third parties. For example, if there is a performance bond posted by the defaulting party, typically it is best to give notice to the surety. Also, sometimes the contract documents require notice of a termination to be given to either a lender, higher tier, or owner. Consider Whether Statutes Impose a Limitation or Constraint on Termination Sometimes the basis for termination might conflict with a separate statute. For example, under the Bankruptcy Code it is technically a violation to terminate a contract on the basis of a declared bankruptcy. You must seek bankruptcy court approval for terminating a contract with a bankrupt debtor. Other times, statutory payment acts or other statutes may require a process or steps to be taken prior to termination. This is particularly true if there are withholdings or demands for payment, which is frequently the case. Ultimately, termination of a party on a construction project is a very strong action with significant repercussions. Missteps in the termination process can compound losses and escalate risk. Care must be taken to approach the termination with careful consideration of strategy and planning in the best interests of both the project and the litigation claims/defenses. It is highly recommended to consult with legal counsel starting with the notice and termination period. Lastly, these approaches are general points for consideration; recognize that each specific situation, project, or contract will have different factors to consider when terminating a downstream party. JEFFREY C. BRIGHT is a Principal attorney in Offit Kurman’s Construction Practice Group and maintains a multi-state construction law practice, representing contractors, subcontractors, owners, construction managers, design-builders, and design professionals. He is licensed and active in construction law matters in PA, MD, DC, VA, and CA. In addition to handling construction litigation and project disputes, including termination of contracts mid-project, he regularly advises on the preparation, revision, and negotiation of construction contracts for various project delivery systems. He can be reached at jeff.bright@offitkurman.com.

August 26, 2026

Family Law

A New Era in Child Custody Law: Why New York’s Proposed Shared Parenting Presumption Will Harm the Best Interests Standard

For more than 50 years, New York has adhered to one fundamental principle in child custody cases: there is no one-size-fits-all answer. Every child is different. Every family is different. Every custody dispute presents its own unique facts, challenges, strengths, and concerns. That principle is embodied in a deceptively simple phrase that has become the cornerstone of New York custody law: the child's best interests. It is not merely a slogan. It is the product of decades of thoughtful decisions by the New York Court of Appeals and the Appellate Divisions, recognizing that judges — not legislators — must evaluate each family individually and fashion custody arrangements based on the evidence in each case. Despite the “best-interests” standard being gender-neutral, some New York legislators find the individualized best-interests standard insufficient or believe it has run its course. They want 100% unmitigated equality from the starting gate — before the evidence is heard, before the family is understood, and before anyone has determined whether equal parenting time is actually best for the child. Equality first; facts later. Enter Senate Bill S4128. Bill S4128 is not New York law. Not yet, anyway. As of the 2025–2026 legislative session, it remains in Committee. But the thinking behind it is dangerous and deserves attention, because when it becomes law it will upend traditional custody analysis: instead of starting with the child and asking what arrangement best serves that child, it starts with an answer — parental equality — and works backward from there. At first glance, the legislation appears benign. After all, who could oppose children having meaningful relationships with both parents? But this bill does not. Instead, it fundamentally changes New York custody law by creating a legal presumption that shared parenting is in a child's best interests and shifting the burden of proof to the parent seeking sole custody. The bill sets forth: "The provisions of this act establish a presumption, affecting the burden of proof, that shared parenting is in the best interests of minor children." It further states: "The burden of proof that shared parenting would be detrimental to such child shall be upon the parent requesting sole custody." Finally, the legislation establishes an order of preference that places an award of shared parenting to both parents first, requiring the court to explain why it declined to order shared parenting whenever a different custodial arrangement is selected. Those provisions mark a dramatic departure from decades of New York law. The Presumption Is the Problem Supporters of the legislation argue that the bill merely encourages judges to consider shared parenting. Critics argue that is incorrect. New York judges already consider shared parenting every day. Current law does not prevent a court from awarding joint legal custody. It does not prevent equal parenting time. It does not prevent creative parenting schedules tailored to a particular child's needs. Indeed, judges frequently fashion parenting plans that maximize each parent's involvement when doing so serve the child's best interests. The existing law is not hostile to shared parenting if the parties agree. But it does not impose it on hostile parents who cannot even agree whether the sun or the moon is in the sky. The proposed legislation does just that. It forces combative litigants to suddenly become pillars of friendship and equanimity. Instead of asking,"What custodial arrangement is in this child's best interests?" the court is first instructed to begin with a predetermined answer and then determine whether someone has produced sufficient evidence to overcome it. That subtle shift has enormous consequences. The presumption becomes the starting point rather than the conclusion. The burden shifts. Litigation changes. Most importantly, the focus shifts away from the child as an individual and toward satisfying or rebutting a legislative assumption. That is precisely what New York's appellate courts have spent decades avoiding. The Legislature Cannot Know Every Family Family Court judges decide custody cases involving real children, not abstract notions. These children include those with autism, anxiety disorders, intensive medical needs, parents working overnight shifts, long-distance parents, communication issues requiring police, exposure to domestic violence, manipulation by one parent, or a need for both parents, and protection from one. No statute can anticipate those facts. No legislative committee can predict them. No presumption can account for them. The legislature has never met these children. The trial judge has. That distinction matters. Experience Cannot Be Legislated Custody trials are unlike virtually every other civil proceeding. Judges observe parents’ testimony. They evaluate credibility. They hear from forensic evaluators. They review school records, medical records, therapy records, Child Protective Services investigations, and police reports. They assess demeanor, consistency, judgment, insight, and empathy. These are countless intangibles that never appear in a transcript. Those observations cannot be reduced to a statutory formula. Nor should they be. The genius of New York's custody law has always been its flexibility. The law recognizes that children are individuals, not categories. The proposed legislation would replace that flexibility with a presumption crafted in Albany by legislators who will never meet the family appearing before the court. The Bill Solves a Problem That Does Not Exist There is nothing inherently wrong with encouraging parents to cooperate. Recognizing the importance of both parents in a child's life is not controversial. Those principles are already reflected in New York law. What is controversial is converting those aspirations into a legal presumption that shifts the burden of proof. Presumptions are appropriate when experience shows that one factual conclusion almost always follows from another. Custody cases are the opposite. Every experienced matrimonial attorney knows that no two custody cases are alike. The facts that matter in one family may be completely irrelevant in another. That is why New York has wisely resisted bright-line rules for decades. The legislature now proposes to create one. And that is where the proposal goes fundamentally wrong. Fifty Years of New York Law Reject Bright-Line Rules The most fundamental flaw in Senate Bill S4128 is not its endorsement of shared parenting. Rather, it is its departure from a principle that has guided New York custody law for generations. There are no categorical presumptions in custody cases because every child deserves an individualized determination based on his or her own circumstances. For more than 50 years, New York has adhered to a fundamental principle in child custody cases: there is no one-size-fits-all answer. Domestic Relations Law § 240(1)(a) directs courts to determine custody "in accordance with the best interests of the child," a standard the Court of Appeals has consistently interpreted as requiring an individualized determination based on the totality of the circumstances. N.Y. Dom. Rel. Law § 240(1)(a); Friederwitzer v. Friederwitzer, 55 N.Y.2d 89, 94–95 (1982); Eschbach v. Eschbach, 56 N.Y.2d 167, 171–74 (1982). Long before phrases such as "shared parenting" and "equal parenting time" entered the public conversation, the New York Court of Appeals recognized that custody disputes cannot be resolved by formulas. They require careful judicial evaluation of the child's particular needs before the court. This individualized approach was articulated decades ago in Lincoln v. Lincoln, where the Court of Appeals recognized that custody litigation differs fundamentally from ordinary civil litigation because the court's paramount obligation is to protect the child's welfare. To fulfill that obligation, the Court authorized trial judges to conduct in camera interviews of children, when appropriate, underscoring that custody determinations require a careful examination of each child's unique circumstances. Lincoln v. Lincoln, 24 N.Y.2d 270, 272–73 (1969). That philosophy permeates nearly every significant custody decision issued by New York's highest court. In Braiman v. Braiman, the Court of Appeals rejected the notion that joint custody should be the norm, noting that it is generally inappropriate when parents are embattled and unable to cooperate. The Court explained that joint custody is reserved for the relatively rare situations in which parents have demonstrated an ability to set aside their personal differences and work together to raise their children. Braiman v. Braiman, 44 N.Y.2d 584, 589–90 (1978). The lesson from Braiman remains as relevant today as it was nearly 50 years ago: joint custody is appropriate only when it serves a particular child's needs, not because the law presumes it should. The Court later reaffirmed that joint custody is appropriate only when the parents possess sufficient cooperation and mutual respect to make shared decision-making workable. Louise E.S. v. W. Stephen S., 64 N.Y.2d 946, 947 (1985). Four years later, in Friederwitzer v. Friederwitzer, the Court reaffirmed that custody determinations must rest on "the best interests of the child" after considering all relevant facts and circumstances. Rejecting mechanical approaches, the Court emphasized that custody decisions require careful weighing of the evidence in each case. Friederwitzer, 55 N.Y.2d at 94–95. The Court explained that no single factor governs the custody determination and that trial courts must evaluate all relevant circumstances bearing on the child's welfare. Id. That same year, the Court decided Eschbach v. Eschbach, perhaps the most frequently cited custody decision in New York. There, the Court articulated what has become the cornerstone of New York custody jurisprudence: courts must consider the totality of the circumstances, including the quality of each parent's home environment, parental guidance, relative fitness, the child's emotional and intellectual development, the stability of existing arrangements, and any other factor bearing on the child's welfare. Significantly, the Court declined to elevate any single factor above the others, instead entrusting trial judges with broad discretion to determine which arrangement serves the child's best interests. Eschbach, 56 N.Y.2d at 171–74. Among the factors identified by the Court are the quality of each home environment, each parent's past performance and relative fitness, the child's emotional and intellectual development, the stability of the existing custodial arrangements, and each parent's willingness to foster the child's relationship with the other parent. Id. The significance of Eschbach cannot be overstated. It rejected formulaic decision-making and rigid hierarchies. Most importantly, it reaffirmed that custody determinations cannot be reduced to a single presumed outcome. That philosophy perhaps reached its clearest expression in Tropea v. Tropea, the Court's landmark relocation decision. Prior to Tropea, New York courts frequently applied rigid rules governing relocation requests. The Court of Appeals expressly abandoned those rules, holding that no single factor should be treated as dispositive and that courts must instead evaluate all relevant facts to determine the child's best interests. Tropea v. Tropea, 87 N.Y.2d 727, 739–41 (1996). Likewise, in Nehra v. Uhlar, the Court recognized that although prior custody agreements and existing custodial arrangements are important considerations, they cannot override the court's independent obligation to determine the child's best interests. Nehra v. Uhlar, 43 N.Y.2d 242, 251 (1977). Although Tropea involved relocation rather than shared parenting, its reasoning is directly applicable here. The Court rejected bright-line rules because they inevitably fail to account for the extraordinary variety of family circumstances in custody litigation. The irony is striking. While the legislature proposes creating a statutory presumption favoring one custodial arrangement, the Court of Appeals has spent decades rejecting rigid rules that interfere with individualized decision-making. A Presumption Is Not Merely a Preference Supporters of Senate Bill S4128 often argue that the legislation encourages meaningful involvement from both parents. If that were all the bill accomplished, there would be little controversy. New York law has long recognized the importance of preserving children's relationships with both parents whenever consistent with their welfare. See Eschbach, 56 N.Y.2d at 171–74. The bill, however, does considerably more. It expressly provides: "The provisions of this act establish a presumption, affecting the burden of proof, that shared parenting is in the best interests of minor children." It further provides: "The burden of proof that shared parenting would be detrimental to the child shall be on the parent requesting sole custody." S. 4128, 2025–2026 Leg., Reg. Sess. (N.Y. 2025). That language is critical. A judicial preference guides discretion. A statutory presumption that shifts the burden of proof, changes the legal framework itself. Instead of beginning with two parents standing on equal legal footing while the court determines what arrangement serves the child's best interests, the legislation instructs courts to begin with a preferred outcome that must be overcome through litigation. That marks a fundamental change in New York custody law. The Reality of Custody Litigation The legislature's proposal also reflects a misunderstanding of how custody cases usually unfold. Few custody disputes involve two equally capable parents who disagree only about the allocation of parenting time. Family Court judges routinely handle cases involving domestic violence, coercive control, untreated mental illness, substance abuse, parental alienation, developmental disabilities, educational disputes, and children with extraordinary medical or psychological needs. Some parents communicate effectively despite the end of their marriage. Others cannot exchange a child without police intervention. Still others demonstrate extraordinary cooperation under extraordinarily difficult circumstances. The point is not that shared parenting is inappropriate. Often, it is precisely the right solution. The point is that no legislature can know which family falls into which category before the evidence is presented. That is why judges conduct hearings. That is why forensic evaluations are ordered. That is why attorneys for the child participate. Furthermore, that is why appellate courts repeatedly emphasize that custody determinations depend on the totality of the circumstances, that no single factor is dispositive, and that considerable deference is afforded to the Family Court's credibility determinations because it has the unique opportunity to observe the witnesses firsthand. Eschbach, 56 N.Y.2d at 171–74; Friederwitzer, 55 N.Y.2d at 94–95; Louise E.S., 64 N.Y.2d at 947. Judicial Discretion Protects Children The genius of New York custody jurisprudence has never been that it favors mothers over fathers — or fathers over mothers. It favors neither. It favors children. By refusing to adopt categorical rules, New York has preserved what matters most: the ability of trial judges to listen to witnesses, evaluate credibility, assess expert testimony, and fashion parenting arrangements tailored to the unique needs of each child. That discretion is not a weakness in our law. It is its greatest strength. The legislature undoubtedly seeks to encourage meaningful parental involvement, an objective few would dispute. But good intentions cannot justify replacing individualized justice with statutory presumptions. The best interests of children are too important to be decided by legislative formula. The question should never be whether the legislature prefers shared parenting. The question should remain the one New York courts have asked for generations: What arrangement is in the best interests of this child? Until someone can demonstrate that New York's courts have failed to answer that question faithfully, and there is no empirical evidence establishing such systemic failure, the legislature should resist replacing decades of thoughtful jurisprudence with a presumption that assumes the answer before the first witness is sworn. The legislature cannot legislate wisdom into custody cases. It cannot legislate parental cooperation. And it cannot legislate what is best for children it has never met. That responsibility properly belongs where New York law has always placed it: with the judges who hear the evidence, evaluate the facts, and decide each case, child by child.

August 25, 2026

Tax

A Missed Tax Court Deadline Is No Longer an Automatic Jurisdictional Death Sentence in the Eighth Circuit

For decades, taxpayers who missed the 90-day deadline to file a Tax Court deficiency petition were often told the same thing: Too late. Case dismissed. The Tax Court has no power to hear you. That answer just changed in the Eighth Circuit. On August 11, 2026, the Eighth Circuit issued a published opinion in Maniktala v. Commissioner, reversing the Tax Court and holding that the 90-day deadline under Internal Revenue Code section 6213(a) is not jurisdictional and may be subject to equitable tolling. I had the privilege of briefing and arguing this appeal on behalf of the taxpayers, making this decision both professionally meaningful and practically important for taxpayers in the Eighth Circuit. The Eighth’s decision may sound procedural. It is. But procedure is often where taxpayer rights either survive or disappear. Why This Matters A notice of deficiency is the IRS’s formal determination that a taxpayer owes additional tax. For most taxpayers, once that notice is mailed, section 6213(a) gives them 90 days to file a petition in the United States Tax Court. Tax Court matters because it allows taxpayers to challenge the IRS before paying the disputed tax. That prepayment forum is often the difference between a taxpayer being able to challenge the IRS at all and being priced out of the fight. Without Tax Court access, a taxpayer may be forced to pay the disputed liability first, pursue an administrative refund claim, and then sue for a refund in federal court if the IRS denies the claim. For many taxpayers, that is not a realistic alternative. The amount at issue may be too large. The process may be too expensive. The taxpayer may never get a meaningful chance to be heard. So, when the Tax Court treats the 90-day deadline as jurisdictional, the consequence is severe. If the petition is late, even by circumstances outside the taxpayer’s control, the court says it has no power to do anything about it. No equitable tolling. No consideration of fairness. No hearing whether the taxpayer acted diligently. Just dismissal. Maniktala changes that rule in the Eighth Circuit. What the Eighth Circuit Held The Eighth Circuit held that section 6213(a)’s 90-day filing deadline is a claims processing rule, not a jurisdictional bar. And this is the important distinction. A jurisdictional rule limits the court’s power. If a deadline is jurisdictional, courts generally cannot forgive a late filing, even for compelling reasons. A claims-processing rule, by contrast, still matters. Deadlines still matter. Taxpayers still need to file on time whenever possible. But a claims-processing deadline may be subject to equitable tolling in appropriate circumstances. In plain English, the court agreed with our position: a late petition does not automatically mean the courthouse doors are locked forever. The Eighth Circuit also held that the deadline is subject to equitable tolling. That does not mean every late petitioner wins. It means taxpayers may have the opportunity to show that they pursued their rights diligently and that extraordinary circumstances prevented timely filing. It is not a free pass to miss the deadline, and it shouldn’t be. But it is a chance to be heard. And in tax procedure, that chance can make all the difference. The Facts Make the Point The Maniktalas filed joint returns claiming research and development credits based on activities of an S corporation. The IRS later issued a notice of deficiency to the shareholders. The notice was mailed on December 20, 2023, and listed March 19, 2024, as the last day to file a Tax Court petition. Our clients, however, did not receive the notice until July 9, 2024. A Tax Court petition was filed on July 19, 2024, after the 90-day period expired. The Tax Court dismissed the case for lack of jurisdiction. On appeal, the Eighth Circuit reversed and remanded so the Tax Court could determine whether equitable tolling is warranted. The Eighth Circuit did not hold that the taxpayers automatically receive tolling. It held that the Tax Court has authority to consider whether they do. That is the point. The Tax Court is no longer required to stop at “late.” It may now ask “why.” The Growing Circuit Split Maniktala is part of a much larger, unsettled national issue. The Eighth Circuit joined the Second, Third, and Sixth Circuits in holding that section 6213(a)’s deficiency petition deadline is not jurisdictional and is subject to equitable tolling. Other circuits have gone the other way or have not yet adopted that view. The Tax Court itself has continued to treat the deadline as jurisdictional in cases not appealable to circuits that have rejected that approach. That means taxpayer rights currently depend, in part, on geography. A taxpayer in one circuit may receive a chance to seek equitable tolling. A similarly situated taxpayer in another circuit may not. That is a hard result to justify when the issue is access to court. As of now, this issue remains active nationally, with circuit law continuing to develop. Unless and until Congress or the Supreme Court resolves the issue nationwide, taxpayers may continue to face different procedural rules depending on where their case is appealable. That is not how access to Tax Court should work. Congress Is Watching Too This is not just happening in the courts. Legislation currently before Congress reflects the same position taxpayers advanced in Maniktala: The Tax Court should have authority to apply equitable tolling in deficiency cases when the facts and circumstances warrant it. The Tax Court Improvement Act would expressly provide that the Tax Court has jurisdiction to toll the section 6213(a) filing period when equity warrants tolling. It would also address the harsh consequences that may follow when a late Tax Court petition is dismissed. That legislative development reflects a broader recognition that procedural deadlines should not become automatic traps that prevent taxpayers from ever challenging the IRS on the merits, particularly when the taxpayer acted diligently, and circumstances beyond the taxpayer’s control caused the late filing. Deadlines matter. But they should not become traps that eliminate judicial review when equity warrants a hearing. What Taxpayers Should Take Away The first takeaway is simple: do not miss the 90-day deadline if at all possible. If you receive a notice of deficiency, act immediately. The deadline is short. Interest may continue to run. Collection consequences may follow. And even in circuits that allow equitable tolling, tolling is not automatic. The second takeaway is just as important: if the deadline has already been missed, the analysis may not be over. Taxpayers should not assume that a late petition automatically ends the fight. Depending on where the case is appealable, and depending on the facts, equitable tolling may be available. The third takeaway is that notices matter. Mail issues matter. Timing matters. Documentation matters. If a taxpayer receives a notice late, never receives it, relies on incorrect information, faces serious circumstances preventing timely filing, or otherwise misses the deadline despite diligence, those facts should be preserved immediately. Equitable tolling is fact intensive. Taxpayers should keep records of everything they do when dealing with the IRS, including notices received, envelopes, mailing dates, calls, correspondence, representative communications, and efforts to act once they learn of a problem. The IRS makes mistakes. Mail gets delayed. Notices are missed. But the burden remains on the taxpayer to show that an extraordinary circumstance, and not simple inattention, caused the missed procedural deadline. The Bottom Line Maniktala gives taxpayers in the Eighth Circuit something they did not clearly have before: the opportunity to ask the Tax Court to consider equitable tolling in deficiency cases. That is not a technicality. It is access to court. And when the IRS says a taxpayer owes more money, access to court is often the difference between having rights on paper and having a real chance to use them.

August 20, 2026

Real Estate

Why Delaware Legal Opinions Matter – Part 5: A Practical Guide to Getting the Opinion to Closing

A Delaware legal opinion is rarely intended to drive the closing schedule, but when the workstream starts too late, it can become one of the last unresolved closing items. Usually, the issue is not the opinion itself; the issue is coordination. The opinion request comes in late. Organizational documents are incomplete. The opinion form does not match the transaction. The authorization documents were prepared without reference to the governing agreement. Or the transaction changes, but Delaware opinion counsel does not receive the revised documents. Most of these problems are preventable. After handling Delaware opinions in transactions of varying size and complexity, an efficient opinion workstream generally follows the same basic sequence. Here is a practical roadmap. Step 1: Identify the Delaware Entities and the Opinion Requirement  Start with the basics: identify which Delaware entities are involved and define each entity's role in the transaction. Determine whether each entity is acting as a borrower, guarantor, pledgor, general partner, managing member, or another transaction party, and then identify exactly what opinion is required. A credit agreement or closing checklist may simply require an “opinion of Delaware counsel,” but that description does not necessarily tell you what Delaware counsel is expected to cover. Obtain the proposed opinion form — or at least the requested opinion provisions — as early as possible. For transaction counsel, the practical question is not whether Delaware counsel can deliver the opinion, but whether the right materials reach the right people early enough. Step 2: Build the Organizational Document Package  For each Delaware entity, assemble the complete organizational record. Depending on the type of entity, the package will typically include: the certificate of formation or incorporation and any amendments the current LLC agreement, partnership agreement, bylaws, or other governing agreement relevant amendments, joinders, assignments, or other modifications certificates of good standing or similar certificates existing resolutions, consents, or other authorization documents relevant to the transaction Do not assume that the certificate filed with the Delaware Secretary of State tells the entire story. For Delaware alternative entities in particular, the governing agreement matters. Delaware law provides significant contractual flexibility. An LLC agreement, for example, may establish approval requirements, manager authority, voting thresholds, restrictions, or other conditions that affect whether the entity can properly authorize a transaction. This organizational package becomes the foundation for the later authorization analysis, so the governing documents should be reviewed before the authorization documents are finalized, not after. Step 3: Provide the Transaction Documents Next, identify the documents the Delaware entity will actually execute. Depending on the transaction, these might include a credit agreement, guaranty, pledge agreement, security agreement, mortgage, purchase agreement, merger agreement, or other operative documents. These documents do not necessarily need to be in final execution form when opinion review begins. They should, however, be sufficiently developed to allow counsel to understand the transaction and determine what the Delaware entity is being asked to do. This distinction matters: waiting for absolute final documents can unnecessarily delay the opinion process, while starting from documents that are changing materially every day can create a different problem. The practical goal is to begin with documents that are substantially settled and then keep opinion counsel informed of material changes as the transaction moves toward closing. Step 4: Determine Who Is Covering What This is one of the most important steps. Not every legal issue involving a Delaware entity is necessarily a Delaware opinion issue. A transaction may involve Delaware entity law, New York contract law, the law of the jurisdiction where real property is located, Article 9 of the Uniform Commercial Code, federal law, or the laws of several other jurisdictions. Different counsel may therefore be responsible for different portions of the overall opinion package. The parties should determine early which opinions are expected from Delaware counsel and which are being provided by primary transaction counsel, local counsel, UCC counsel, or other specialized counsel. Doing this early prevents a particularly frustrating closing-day discovery: everyone assumed someone else was covering the opinion. Step 5: Review the Requested Opinions Before the Closing Crunch Once the organizational documents and substantial final transaction documents are available, the requested opinion language can be analyzed. This is where assumptions, qualifications, limitations, and proposed revisions should be addressed. An opinion request should not be treated as boilerplate simply because it came from a form used in another transaction. The entity may be different, the governing documents may be different, the transaction structure may be different, and the governing law may be different. Most importantly, the opinion being requested may be different. A power opinion is not an authorization opinion; an authorization opinion is not an enforceability opinion; and an enforceability opinion is not a perfection or priority opinion. Precision matters. Resolving those distinctions before the closing date is considerably easier than negotiating them while everyone is waiting for funding. Step 6: Match the Authorization to the Governing Documents Once the transaction structure is sufficiently settled, the authorization documents should be checked against the entity's governing documents. Who has authority to approve the transaction: members, managers, the board, or another person or entity with consent rights? Does the governing agreement impose a particular voting threshold, and if the entity acts through another entity, has the authority chain been followed all the way through? The goal is simple: the transaction documents, governing documents, authorization documents, and signature blocks should tell the same story. When they do not, that is when seemingly small issues can become closing problems. Step 7: Keep Delaware Counsel Informed of Material Changes Transactions change, and that is normal. Not every revised draft needs to restart the opinion analysis, but changes affecting the Delaware entity, its obligations, the parties, the transaction structure, or the documents being executed should be communicated promptly. A seemingly small change to the deal terms may affect an opinion conclusion. The safest approach is not to guess whether a change matters, but to identify the change and allow counsel responsible for the opinion to determine whether it affects the analysis. Step 8: Finish the Opinion Before Everyone Is Waiting for It By the time the transaction reaches closing, the substantive opinion work should ideally be complete. The remaining items should primarily involve confirming final documents, completing appropriate bring-down diligence, such as confirming good standing and checking for final changes to governing or transaction documents, confirming execution and authorization, and issuing the opinion. That is the objective: the closing table is not the place to discover an unusual provision in an LLC agreement, negotiate the scope of an opinion, or determine who had authority to approve the transaction. Those issues should already have been resolved. The Practical Takeaway The Delaware opinion process does not need to be complicated. In most transactions, the formula is straightforward: Identify the entities Obtain the opinion form Assemble the organizational documents Provide the transaction documents Allocate opinion coverage Confirm authorization Resolve comments Communicate material changes Close None of those steps are particularly remarkable; what matters is the order in which they happen. A Delaware legal opinion is a relatively small closing deliverable, but it sits at the intersection of the entity's governing documents, Delaware law, the transaction documents, and the closing requirements. That is what makes preparation important. The best opinion process is the one nobody remembers after closing, because the issues were identified early, the documents matched, and the opinion was ready when needed.

August 19, 2026

Labor and Employment

When Safety and Disability Rights Collide: Navigating the ADA in the Workplace

Employers in the construction and manufacturing sectors occasionally confront complex workplace issues involving employees with disabilities, often related to prior injuries, where those conditions may pose safety risks to the employees themselves or to their co-workers. Such situations often involve employees who have valuable skills and experience, but who pose safety risks if they are assigned the full spectrum of tasks under their job description. These employees are protected by rights under the Americans with Disabilities Act (ADA), but their employer has an obligation to prevent them and co-workers from being exposed to known risks of serious physical harm. This balance is not easy to navigate. For HR professionals and in-house counsel, understanding where the ADA draws its lines, and where employers most often cross them, is essential to managing safety-related situations without inviting a discrimination claim. The Direct Threat Standard: The Only Real Safety Exception  The ADA doesn't allow employers to exclude an employee from a position, or take adverse action, simply because the employee has a disability that could create risk. The statute carves out a narrow exception: an employer may act if the employee poses a direct threat, which is defined as a significant risk of substantial harm to the health or safety of the employee or others that cannot be eliminated or reduced through reasonable accommodation. That standard has teeth, and each word matters: Significant risk, not a slightly elevated or speculative one Substantial harm, not minor or theoretical injury Assessed through an individualized evaluation, not generalized assumptions about a diagnosis or condition Based on the most current medical knowledge and/or objective evidence, not outdated stereotypes or a manager's gut instinct Considered only after evaluating whether reasonable accommodation would neutralize the risk The EEOC has been consistent for decades: an employer cannot rely on generalizations about a disability, an employee's diagnosis in isolation, or a “better safe than sorry” instinct. The threat has to be real, current, and specific to the individual in the specific job. The Four-Factor Direct Threat Analysis  When evaluating whether a genuine direct threat exists, courts and the EEOC look at: Duration of the risk. Is this a temporary condition or an ongoing one? Nature and severity of the potential harm. How serious could the injury be? Likelihood the harm will occur. Is this a real probability or a remote possibility? Imminence of the harm. How soon could the harm materialize? Employers frequently stumble by skipping bullet point one and going straight to bullet point two, imagining worst-case harm, without seriously grappling with likelihood and imminence. A theoretical catastrophic outcome with a low probability of occurring generally will not satisfy the standard. Essential Functions Come First Before any safety analysis, the more fundamental question is whether the employee can perform the essential functions of the position, with or without reasonable accommodation. Safety concerns are frequently really essential function concerns in disguise — an employer worried about a “safety issue” is often actually worried about whether the person can physically or mentally execute a core job duty. This distinction matters procedurally. Essential function analysis and direct threat analysis are related but separate inquiries, and conflating them tends to produce sloppy, defensible-sounding decisions that don't hold up. A written, thorough, and updated job description identifying essential functions, developed before a dispute arises, is one of the most valuable tools an employer can have in either analysis. Objective Evidence, Not Instinct A recurring theme across ADA safety litigation is the demand for objective evidence over subjective judgment. Employers who prevail tend to point to: Documented, specific incidents (falls, near-misses, errors with safety implications) Credible medical opinions tied to the actual essential functions of the job Observable, recent performance or behavioral indicators, not stale history or rumor Employers who lose tend to rely on assumptions: the belief that a particular diagnosis inherently makes someone unsafe, or that a visible mobility aid, medication, or past medical leave signals risk. The ADA's core anti-stereotyping purpose is aimed precisely at that kind of reasoning. Reasonable Accommodation Still Comes First Even where a legitimate safety concern exists, the ADA requires employers to consider whether reasonable accommodation would eliminate or sufficiently reduce the risk before taking adverse action. This might include modified duties, additional safety equipment, adjusted schedules, or reassignment. Only if no accommodation reduces the risk to an acceptable level, and the employer can show that the accommodation would pose undue hardship, does exclusion become legally supportable. Skipping this step, even with good intentions, is one of the most common and costly mistakes employers make. Fitness-for-Duty Exams: A Common Flashpoint Safety concerns often lead employers toward fitness-for-duty (FFD) exams, which are permissible under the ADA only when job-related and consistent with business necessity — generally requiring objective evidence that a medical condition may impair job performance or create a safety risk. A single ambiguous incident, a known diagnosis standing alone, or generalized concern typically won't clear that bar. The request also has to be narrowly scoped to what's needed to assess ability to safely perform the job, not a broad inquiry into unrelated medical history. The Bottom Line The ADA doesn't ask employers to ignore safety. It requires them to prove it, with facts, with process, and with an honest accounting of whether accommodations could have solved the problem. Employers who build that discipline into their practices protect their workforce and substantially reduce their legal exposure at the same time.

August 19, 2026

Commercial Litigation

AI, Data Breaches, and an Old Lesson from the Law of Bailment

OpenAI recently disclosed that, during testing of one of its frontier artificial intelligence models, AI agents working to solve assigned tasks found ways to access the internet and ultimately infiltrate the systems of another AI company, Hugging Face. They did so through pathways OpenAI's developers never intended them to reach. The incident quickly dominated technology and cybersecurity headlines. It also prompted OpenAI to send two of its security engineers to Black Hat USA 2026, one of the cybersecurity industry's premier conferences, to discuss what occurred.1  Although the Black Hat presentation included highly technical explanations of the exploits, there were two noteworthy statements that stood out from a legal perspective. First, one OpenAI engineer explained that agents who became stuck on their assigned tasks "thought to try to get internet access in ways we didn't intend." Second, the presenters repeatedly emphasized that the incident was not the result of malicious human actors. It was an unintended consequence of testing frontier AI systems whose behavior ultimately extended beyond what their developers anticipated.2 Some observers view the incident as another example of the broader concerns surrounding AI autonomy and alignment. Others see it as evidence that cutting-edge AI systems require greater oversight, testing safeguards, and deployment controls. Regardless of where one falls in that debate, the incident highlights a challenge general counsel cannot afford to ignore. Organizations increasingly face risks not only from malicious actors, but also from highly capable systems pursuing legitimate objectives through unexpected means. The legal implications of that reality, however, may be far less revolutionary than many assume. The Technology Has Changed. The Legal Question Has Not.   In Krupa v. TIC International Corp., a federal court recently summarized the relationship between businesses and customer data in simple terms: "Consumers entrust their data to firms with the expectation that those firms take reasonable care against data breaches."3 Long before courts dealt with ransomware, credential theft, or AI-enabled cyberattacks, they addressed a more basic question. What duty does someone owe when entrusted with another person's property? The law answered that question through the doctrine of bailment. A custodian was not an insurer against every loss. But the custodian was expected to exercise reasonable care over property entrusted to it. More than a century ago, in Claflin v. Meyer, a New York court explained that a warehouse owner was not automatically liable simply because thieves successfully stole property entrusted to his care. Liability turned on whether the warehouse failed to exercise the degree of care that a prudent person would use to protect his own property under similar circumstances.4 That same principle continues to echo through modern data-breach litigation. Courts may label the theory differently depending on the jurisdiction. One court may analyze negligence. Another may discuss bailment. A third may focus on some other duty. Yet the practical question remains remarkably consistent throughout. Did the company take reasonable steps to protect information entrusted to its care? Today's businesses may not store their customers’ data in warehouses, but they are the keepers of a vast array of valuable digital data. Banks maintain clients’ financial information. Law firms possess confidential communications. Healthcare providers store patient records. Virtually every organization now serves as a custodian of information entrusted to it by someone else. In the nineteenth century, courts looked at locks, guards, and warehouse security. Today they examine the overall cybersecurity posture of an organization. The specific safeguards may be different, but the inquiry is very similar. The tools have changed. The standard has not. Why the OpenAI Incident Matters   The significance of the OpenAI-Hugging Face incident is not that it suddenly created a new legal duty. It may, however, influence what decision-makers come to expect from organizations entrusted with sensitive information. During the Black Hat presentation, OpenAI's engineers acknowledged a concern increasingly shared across the cybersecurity industry. Offensive AI capabilities may be advancing faster than defensive ones. For general counsel, that does not mean every company must immediately deploy cutting-edge AI security tools or spend unlimited resources on cybersecurity. Courts have never required perfection, and they are unlikely to start now. But reasonable care is not a static concept. As threats evolve, expectations evolve. A security posture that appeared reasonable five years ago may not appear reasonable five years from now. What General Counsel Should Be Asking   The lesson from the OpenAI incident is not that every company needs to keep up with all the goings-on of every cutting-edge AI company. The lesson is that cybersecurity can no longer be treated as an issue that belongs exclusively to IT. General counsel do not need to know how to configure firewalls or administer cloud environments. They should, however, be able to explain why the organization chose the safeguards it did and why those safeguards were reasonable under the circumstances. In advising a client after reviewing the OpenAI incident, it would be important to determine whether management could confidently answer a handful of basic questions: What sensitive information does the company hold? Where is that information stored, and who has access to it? What cybersecurity standards or frameworks guide the company's program? How often does the company assess new risks or known vulnerabilities? Which vendors store or process sensitive information for the company? How does the company monitor emerging AI-related cybersecurity threats? When did the company last conduct a tabletop exercise or incident-response drill? If a breach occurred tomorrow, what evidence would show that the company acted reasonably? The goal is not merely to have answers. The goal is to document the process. If a breach ultimately occurs, a company is far better positioned when it can point to documented, pre-breach evaluations of its cybersecurity risks and safeguards. That evidence tells a compelling story. It shows that management recognized the risks, discussed potential safeguards, consulted the appropriate professionals, and made informed decisions before anything went wrong. A judge or jury is generally more likely to view that conduct as reasonable than a company attempting to reconstruct and justify its decisions only after a breach has occurred. The Legal Standard Has Not Changed The emergence of increasingly capable AI systems has generated plenty of headlines and speculation. Some of that concern may prove justified. Some may prove overstated. From a legal perspective, however, the underlying principle remains remarkably familiar. No company is expected to create an impenetrable system. No company is expected to anticipate every threat. What courts have historically required is reasonable care. AI may have altered the speed, scale, and sophistication of cyberattacks. Yet the fundamental question that follows a breach remains much the same as it was when courts evaluated warehouse burglaries more than a century ago. Did the company act reasonably to protect what was entrusted to its care? The warehouses have changed. They are now digital. The duty of reasonable care, however, remains the same. 1 Michael Dalton & Eric Wallace, The "Breaking" News: The OpenAI-Hugging Face Incident: A Technical Reconstruction and Its Implications for AI, Black Hat USA 2026, YouTube (Aug. 2026), https://www.youtube.com/watch?v=87DyyMV0kCY. 2 Id. 3 Krupa v. TIC Int'l Corp., No. 1:22-cv-01951-JRS-MG, 2023 WL 143140, at *2 (S.D. Ind. Jan. 10, 2023). 4 Claflin v. Meyer, 75 N.Y. 260, 264-65 (1878). See also In re Target Corp. Customer Data Sec. Breach Litig., 66 F. Supp. 3d 1154, 1175-77 (D. Minn. 2014) (allowing data-breach claims to proceed past the pleading stage).

August 17, 2026

Labor and Employment

When Does the Commute Count? What Two New DOL Opinion Letters Mean for Flexible Schedules

Employers have been asking a version of the same question for years: If we let employees split their day between home and the office, or let a field employee handle calls before getting in the car, are we suddenly on the hook to pay for the drive? On August 6, 2026, the Department of Labor's Wage and Hour Division answered that question twice, in two opinion letters (FLSA2026-9 and FLSA2026-10) that reach opposite conclusions on similar facts. Read together, they give employers a genuinely useful roadmap for structuring flexible and hybrid schedules without accidentally converting an employee's commute into paid working time under the Fair Labor Standards Act. The Employee's Choice: Mid-Day Commuting Stays Unpaid The first letter deals with a familiar hybrid-work scenario. Employees want to work part of the day from home and part from the office, timing their drive to dodge rush hour rather than sitting in traffic during the worst of it. The employer worried that under the FLSA's continuous workday doctrine, once an employee clocks in for the day, any travel before clocking out again becomes compensable, even if it is really just a commute that happens to fall in the middle of the day rather than at the beginning or end. WHD said no. When the employee decides when to travel and that decision is driven by personal preference rather than any work demand, the trip remains what it has always been: an ordinary commute. It does not matter that it happens mid-shift. The agency went further and effectively created a third bucket of non-compensable time that exists alongside off-duty periods and bona fide meal breaks: voluntary, employee-driven travel that falls inside the continuous workday but outside the definition of "hours worked." This is a meaningful win for employers trying to offer real flexibility. It confirms that letting people avoid gridlock, or duck out mid-afternoon to handle something at home before logging back in later, does not by itself create new wage exposure. The Employer's Control: Travel Bookended by Required Work Gets Paid The second letter tells a different story, and the contrast is the point. Here, a field service engineer with no fixed office spends up to an hour most mornings on the phone, fielding pages, and scheduling appointments with clients and colleagues, before ever leaving the house in a company vehicle to reach the first job. WHD found that the scheduling calls themselves are compensable because they are integral to the engineer's actual job of installing and servicing equipment. More importantly for scheduling purposes, the drive that follows is compensable too, because the employer requires substantial work immediately before and immediately after the travel, and because the employer, not the employee, controls when and how that travel occurs. Notably, WHD drew a line even within this letter. Simply receiving pages during the drive was treated as incidental to using an employer-provided vehicle and did not, by itself, trigger compensability. The dividing line the agency keeps returning to is not the mere presence of a phone or a laptop during the commute; it is whether the employer is dictating the timing of the trip and sandwiching it between required work. Reading the Two Letters Side by Side Both opinion letters apply the same "primary beneficiary" framework that has guided FLSA travel-time analysis for decades, and both reach different results because of who is actually calling the shots. Where the employee sets the schedule, and the travel serves the employee's own convenience, the trip stays an ordinary, unpaid commute even if it happens smack in the middle of a workday. Where the employer sets the schedule and requires real work on both ends of the drive, the travel loses its status as an ordinary commute and becomes paid time. What This Means for Employers Right Now For employers running hybrid schedules, offering flexible start and end times, or managing a field-based workforce, these letters offer something rarer than most agency guidance: a clear, factor-based test that can actually be built into policy. The safest ground is genuine employee choice over the timing of travel, paired with no requirement to perform work immediately before or after the drive. The moment an employer starts dictating when someone has to leave, or requiring calls, paperwork, or scheduling tasks right up against the commute, the analysis shifts and the travel time risk goes up. It is worth remembering that opinion letters are not binding law, but they do carry real practical weight. An employer who structures a policy consistent with an opinion letter and later faces a Fair Labor Standards Act claim on the same facts has a strong argument against a finding of willfulness, which can matter enormously for liquidated damages and the statute of limitations. It is also worth remembering that these letters interpret federal law only. A number of states impose stricter rules on what counts as compensable travel time, so any policy built around this guidance still needs to be checked against state law before it is rolled out. Employers revisiting hybrid work policies, flexible scheduling, or field employee protocols in light of this guidance should take a close look at who actually controls the timing of the commute and what, if anything, employees are required to do immediately before or after they get in the car.

August 14, 2026

Commercial Litigation

Data Center Developers Take Note: Virginia Court Allows Nuisance Suit Against Amazon to Proceed

Virginia's booming data center industry received an important legal reminder this summer. In Newsom v. Amazon Data Services, Inc., a federal court in Virginia allowed a neighboring property owner's nuisance lawsuit against Amazon to move forward, overruling, in part, Amazon's motion to dismiss. Newsom v. Amazon Data Services, Inc., W.D. Va. No. 3:25-CV-00074, 2026 WL 1993954, at *1 (W.D. Va. July 10, 2026). The landowner and business tenant plaintiffs alleged that construction of Amazon's Louisa County data center created excessive noise, bright lights, dust, flooding, water-quality issues, vibrations, structural cracking to the plaintiffs’ property, and disruptions to the plaintiffs’ business. The court found the plaintiffs’ allegations sufficient to withstand a motion to dismiss. The case will now proceed, and discovery can begin. Why This Matters The decision is significant because it reinforces a growing trend of opposition and resistance to data center developments. Even if a project is properly permitted, it can still face nuisance claims from neighboring property owners or occupants. Virginia courts have long recognized that lawful development activities can become actionable if they unreasonably interfere with a neighbor's use and enjoyment of property. Bowers v. Westvaco Corp., 244 Va. 139, 147, 419 S.E.2d 661, 667 (1992). Just as importantly, the court refused to analyze each complaint in isolation. Instead, it looked at the alleged impacts collectively, considering the combined effects of noise, dust, lights, vibrations, flooding, and other conditions on the neighboring property. For data center developers, that approach creates risk. A complaint that might appear manageable when viewed issue-by-issue can look much different when all alleged impacts are bundled together into a single nuisance claim. A Growing Challenge for Large-Scale Projects The ruling comes as data center development continues to expand beyond Northern Virginia into communities such as Louisa County and elsewhere across the country. These projects often involve years of construction activity, extensive grading, heavy truck traffic, large-scale utility work, and around-the-clock operations. As a result, developers should expect increased scrutiny from nearby residents and businesses, particularly when projects are located near existing homes or commercial properties. Key Takeaways for Developers Developers should view this decision as a reminder to focus not only on regulatory and permitting compliance but also on neighboring-property impacts. Some practical lessons include: Document noise, dust-control, and stormwater-management efforts Investigate complaints from neighboring property owners and occupants promptly Engage with neighboring property owners early in the development process Recognize that tenants and occupants, not just property owners, may have standing to bring nuisance claims in certain circumstances Bottom Line Newsom is only an initial procedural ruling, not a determination that Amazon is liable. But it sends a clear signal that Virginia courts are willing to entertain nuisance claims arising from large-scale data center construction when neighbors plausibly allege substantial interference with their property rights. For developers, owners, and contractors, the case is a reminder that successful projects require more than permits and approvals. Managing the impact on neighboring properties may be just as important as managing the project itself.

August 13, 2026

Family Law

High-Risk Protection Reform: Rethinking Orders of Protection in High-Risk Domestic Violence Cases

Every day, judges in New York issue Temporary Orders of Protection to help prevent domestic violence. These orders play a crucial role. They can remove an abuser from the home, prohibit contact, require surrender of firearms when permitted, and give law enforcement clear authority to act if the order is violated. Just as paper cannot refuse ink, the order itself cannot stop physical violence. The order can ban violent acts and punish violations, but it cannot physically stop someone determined to cause harm. This is not meant as a criticism of courts or judges. It simply shows that orders of protection should be the first step in keeping victims safe, not the last. Unfortunately, that is often the case. The order is issued, but the abuse continues – because it cannot be stopped without putting the offender in jail. And on many occasions, the offender does more than just continue the abuse. Most domestic violence homicides come with warning signs. These can include increasing control, stalking, threats to kill, strangulation, access to guns, prior assaults, and violations of court orders. The period immediately after separation or a court action is especially dangerous, as abusers may feel they are losing control. The main question, therefore, is not whether New York should continue issuing orders of protection — they are clearly needed. The real issue is whether a Temporary Order of Protection in high-risk cases should automatically trigger additional protective measures. This issue is not theoretical. In April of this year, Tomeka Kamwani, a 41-year-old New Jersey nurse and mother of four, reportedly obtained a temporary restraining order after her former fiancé followed her to a friend’s residence. According to her family, he repeatedly violated the order. Court records reported by NJ.com indicate that he was subsequently charged with burglary, terroristic threats, criminal mischief, and simple assault after allegedly breaking into her home and assaulting her. A request to detain him pending trial was denied. Weeks later, according to her family, he entered her home, shot her three times, and then killed himself while two of her children were present. See Matt Gray, N.J. Nurse Killed by Ex-Fiancé in Murder-Suicide Weeks After Getting Restraining Order, Family Says, NJ.com (Apr. 2, 2026), republished by Yahoo News; Shawnette Wilson, Vigil Held for Swedesboro Nurse and Mother of Four Killed in Suspected Domestic Violence, FOX 29 Philadelphia (Apr. 3, 2026). In another case in April of this year, Victoria Alexander, also a New Jersey nurse, was killed at her workplace in Egg Harbor Township. Prosecutors report that her estranged husband blocked her car, left suicide notes, pursued her into her workplace, shot her multiple times, and then took his own life. The Atlantic County Prosecutor described the incident as “a tragic and deliberate act of domestic violence.” See Stephen Sorace, New Jersey Nurse Gunned Down at Work by Estranged Husband in Murder-Suicide: Police, Fox News (Apr. 14, 2026); EHT Nurse Killed in “Tragic and Deliberate Act of Domestic Violence,”, BreakingAC (Apr. 14, 2026). Despite differences in location and procedure, both cases reveal a common failure: warning signs were evident before the fatal incidents. New York’s Strong but Reactive Framework New York law gives Family Court and Criminal Court substantial authority to protect victims of domestic violence. Article 8 of the Family Court Act authorizes orders of protection that may include stay-away directives, no-contact provisions, and other restrictions to prevent further abuse. Courts may consider prior abuse, threats, substance abuse, access to weapons, and related risk factors when determining appropriate conditions. See N.Y. Fam. Ct. Act § 842 (McKinney 2026). It is also important to distinguish a Temporary Order of Protection from a Temporary Restraining Order. A Temporary Restraining Order, or TRO, is generally a civil litigation tool used to preserve property, assets, contractual rights, or the status quo while a lawsuit is pending. In New York, TROs may arise in Supreme Court commercial or matrimonial matters, Surrogate’s Court estate disputes, federal intellectual-property or business cases, and certain civil matters involving property or contractual interference. By contrast, a Temporary Order of Protection, or TOP, is directed at personal safety and behavior. It is issued by courts with authority over family offenses, criminal charges, or matrimonial proceedings, most commonly Family Court, Criminal Court, and Supreme Court when connected to a divorce action. For the public, the difference is practical: a TRO may freeze a bank account, stop a sale, or preserve business rights, whereas a TOP is the court order meant to protect a person from abuse, threats, stalking, harassment, or violence. That distinction matters because the article’s focus is not ordinary civil restraint; it is whether personal-safety orders in high-risk domestic violence cases provide sufficient immediate protection beyond the paper order itself. New York has also strengthened firearm surrender provisions. Family Court Act § 842 -a requires an inquiry into firearm access when a temporary order is issued and authorizes the suspension, surrender, seizure, and related protections in specified circumstances. Criminal Procedure Law § 530.14 provides parallel firearm-surrender authority in criminal cases. See N.Y. Fam. Ct. Act § 842-a (McKinney 2026); N.Y. Crim. Proc. Law § 530.14 (McKinney 2026). These provisions are not symbolic; they recognize that domestic violence can become lethal quickly when threats, weapons, and separation converge. The case law underscores both the power and the limits of orders of protection. In People v. Wood, 95 N.Y.2d 509, 511–12, 742 N.E.2d 114, 115–16, 719 N.Y.S.2d 639, 640–41 (2000), the Court of Appeals described New York’s parallel civil and criminal protective-order statutes as designed to “stem the tide of domestic abuse between people locked in destructive relationships.” Id. at 516, 742 N.E.2d at 119, 719 N.Y.S.2d at 644. The decision arose in a double-jeopardy context, but its premise remains important: orders of protection constitute a broader public response to domestic abuse, not simply private paperwork between litigants. These laws matter and have saved lives. But they are not enough if the legal system treats issuing an order as the last step. A court order tells someone what not to do, but it does not track their actions, verify that guns are removed, coordinate agencies, assist with emergency moves, or ensure that safety plans continue. For many people, the risk of arrest is enough to stop them. But for the most dangerous offenders, this is not always true. Sometimes, the first time they violate the order is the last warning before a tragedy occurs. The Warning Signs Are Known Research shows that requesting an order of protection often indicates that the danger is higher, not that the order does not work. The warning signs are clear, but the main problem is the lack of an automatic, coordinated response when these signs appear. Those indicators include: Threats to kill the victim, children, others, or the offender himself Prior strangulation or attempted strangulation Access to firearms or other deadly weapons Stalking, surveillance, or obsessive jealousy Escalating violence, forced sexual conduct, or violence during pregnancy Recent or anticipated separation Repeated violations of prior orders of protection Statements suggesting the offender has “nothing left to lose” When several risk factors are present, the danger is real and predictable, not merely a possibility. These situations require more than a written warning. Lessons from Australia Australia offers useful models because several jurisdictions treat high-risk domestic violence as a continuing public-safety emergency, not merely a court case. Victoria’s Multi-Agency Risk Assessment and Management Framework (MARAM) provides a shared structure for identifying, assessing, and managing family violence risk across agencies. It emphasizes coordinated safety planning, information sharing, and keeping perpetrators “in view” rather than placing the burden of safety solely on victims. See State Gov’t of Victoria, Family Violence Multi-Agency Risk Assessment and Management Framework (updated July 27, 2023). New South Wales offers another example through Safer Pathway. Its Domestic Violence Safety Assessment Tool evaluates threats to victim-survivors’ life, health, and safety. Cases deemed to pose a serious threat may be referred to Safety Action Meetings, where police and government and non-government service providers share relevant information and develop coordinated steps to reduce risk. See N.S.W. Dep’t of Communities & Justice, General Information About Safer Pathway (Oct. 6, 2023); N.S.W. Dep’t of Communities & Justice, Domestic Violence Safety Assessment Tool (Apr. 29, 2026). No system can promise complete safety, but these approaches are based on the right idea: high-risk cases need a team response that goes beyond just giving an order. A New York High-Risk Protection Protocol New York should improve its system by establishing a statewide High-Risk Domestic Violence Protection Protocol. This protocol should not depend on the decisions of individual courts, prosecutors, police, or service providers. Instead, it should activate automatically when a Temporary Order of Protection is issued and there are clear signs of serious danger. At minimum, the protocol should include: Mandatory lethality assessment at the time emergency relief is considered, including the victim’s perception of danger Automatic referral of serious-threat cases to a multidisciplinary high-risk team Immediate firearm verification, including confirmation of surrender and access to unregistered weapons, ammunition, and third-party firearms Emergency practical protection, including relocation, secure communications, transportation, workplace and school safety planning, and technology-stalking assessment Continuing judicial review to confirm service, firearm compliance, violations, changes in risk, and implementation of the protection plan Carefully limited information sharing with confidentiality, due process, privilege, medical privacy, and record-security safeguards in place The aim is not to take away judicial discretion or weaken due process. People must still receive notice, a meaningful opportunity to be heard, decisions tailored to their situation, fair conditions, set time limits, and regular reviews. But due process does not mean courts and agencies should ignore real evidence of deadly risk. The Required Shift: From Paper Protection to Real Protection This reform is both urgent and about changing how we think. New York should look beyond just past violations and focus on taking action to prevent deadly harm to those who need protection. A Temporary Order of Protection remains important. However, when there are clear signs of possible homicide, it should prompt risk assessment, teamwork, firearm checks, safety planning, and continued oversight. A written order by itself cannot stop violence. But if the legal system treats a high-risk protection order as an urgent warning rather than the last resort, it could help prevent future harm. New York should adopt this approach.

August 12, 2026

Intellectual Property

Pop Art Time Bomb: The Second Circuit's Ruling in Hayden v. Koons

In the late 1980s, American artist Michael Hayden created a Styrofoam serpent sculpture for Ilona Staller, the Italian adult film actress and parliament member better known as Cicciolina, to use as a prop during her live erotic performances. Hayden sold the work to Staller's production company in 1988 for approximately $900. A year later, Staller’s husband, American artist Jeff Koons, posed with Staller for a series of erotic photographs that would become Koons’ Made in Heaven series. Three of those works depicted Koons and Staller atop Hayden's sculpture, and they debuted at the 1990 Venice Biennale to what Hayden himself described in his complaint as a "media sensation and scandal" that "launched Koons into the art world's stratosphere." Hayden claims he did not discover any of this until 2019, when a news article about an unrelated Staller lawsuit caught his attention. He registered his copyright and sued Koons in December 2021.  The case never reached the merits. The Copyright Act requires that infringement claims be filed within three years of when the copyright owner discovers, or reasonably should have discovered, the infringement. The Second Circuit affirmed dismissal on statute of limitations grounds, rejecting Hayden's argument that constructive discovery requires a plaintiff to have actual knowledge of specific triggering facts before the clock starts running. The court clarified that constructive discovery turns on a fact-intensive, objective inquiry into whether a reasonably diligent copyright holder, given all the surrounding circumstances, should have uncovered the infringement. Applying that standard, the panel found the answer here was obvious: Hayden lived in Italy for nearly three decades, was fluent in Italian, consumed Italian news daily, had a direct professional relationship with Staller, and was present in Italy during the very Biennale that made Koons internationally famous, with Staller prominently featured. The court was careful to note that its ruling does not create a "celebrity privilege" that automatically starts the limitations clock whenever a famous artist is involved. Fame is one factor among many, not a categorical rule. The practical lesson for copyright owners is sobering. A rights holder who ignores widespread, international coverage of allegedly infringing work does so at significant legal peril, regardless of whether they actually saw that coverage. Hayden's claim failed not because he sat on a known injury, but because the court concluded a reasonably diligent person in his position could not plausibly have missed it.

August 11, 2026

Family Law

Should the Future of Frozen Embryos Be Addressed in a Prenuptial Agreement?

When couples are planning a wedding, conversations about finances, property, and future goals are common. For couples who are considering in vitro fertilization (IVF), have already created frozen embryos, or anticipate using assisted reproductive technology in the future, there is another important topic that deserves careful discussion: What happens to embryos if the marriage ends? While no one enters a marriage expecting divorce, addressing these issues in a prenuptial agreement can provide clarity, reduce conflict, and protect both parties from emotionally and financially costly disputes. Unlike bank accounts or real estate, frozen embryos occupy a unique legal and ethical space. They represent both reproductive potential and significant emotional investment. When a relationship ends, former spouses may disagree about whether embryos should be used to attempt a pregnancy, donated to another individual or couple, donated for scientific research, or destroyed. These disagreements can become some of the most difficult issues courts face in divorce proceedings because they involve competing interests in reproductive autonomy. A carefully drafted prenuptial agreement may include provisions that outline the parties' intentions regarding embryos created before or during the marriage. For example, the agreement may specify: Who will have decision-making authority if the marriage ends Whether embryos may be used only with the consent of both parties Whether one spouse waives any future claim to use the embryos Whether the embryos will be donated or discarded if the parties cannot agree How expenses related to storage will be handled Although the enforceability of these provisions depends on state law and the specific facts of the case, documenting the parties' intentions before a dispute arises can be valuable. Divorce often involves heightened emotions. Without prior agreement, decisions about frozen embryos may become lengthy and expensive legal battles. Discussing these issues before marriage offers several benefits: It encourages open communication about future family planning It helps both parties understand each other's expectations It reduces uncertainty if circumstances change It may minimize litigation and legal costs Having these conversations while both parties are working together is often far easier than attempting to resolve them during a divorce. Laws governing embryo disputes vary significantly from state to state. Some courts place substantial weight on prior agreements between the parties, while others balance competing constitutional and public policy interests. In addition, fertility clinic consent forms may also play an important role in determining what happens to stored embryos. Because the legal landscape continues to evolve, couples should work with an experienced family law attorney and, when appropriate, coordinate with their fertility clinic to ensure their agreements are consistent and as effective as possible under applicable law. A prenuptial agreement is more than a tool for protecting financial assets. For couples pursuing or anticipating assisted reproductive technology, it can also provide a thoughtful framework for addressing one of the most personal decisions they may ever face. Planning for the future does not reflect a lack of commitment to the marriage. Instead, it reflects careful communication, informed decision-making, and respect for each person's reproductive rights. By addressing the disposition of embryos before conflict arises, couples can reduce uncertainty and focus on building their future together with greater confidence.

August 11, 2026