Estates and Trusts
Estate Planning for Musicians and Protecting Your Legacy Off the Stage
For musicians, estate planning is not just about deciding who inherits guitar collections or song royalties. It is about protecting your artistic legacy, ensuring your intellectual property is handled according to your wishes, and providing clarity for loved ones who may be unfamiliar with the nuances of the music industry. Unlike a typical estate plan, musicians face unique considerations, especially when it comes to rights management, royalties, and long-term protection of their creative works. Whether you are a seasoned performer or an up-and-coming artist, here are essential estate planning steps every musician should take. Catalog and Protect Your Intellectual Property Your songs, recordings, compositions, and even unreleased material are valuable assets. The first step is creating a comprehensive inventory of your published works, unreleased recordings or demos, copyright registrations, licensing agreements, and publishing contracts. Ensure these assets are clearly documented in your estate plan, which means if you have a revocable trust in place, these assets must be “assigned” to that trust to avoid probate. You should also provide instructions to your trustee or executor on how these assets should be managed, distributed, and monetized after your death. Establish Ownership Structures for Royalties Royalties can continue to generate income long after a musician’s passing. To ensure proper management, it is most efficient to set up a trust to collect and distribute these royalties to your beneficiaries. A trust can provide the mechanism to provide ongoing support to your loved ones to ensure they receive the funds in a way that makes sense, particularly if your beneficiaries are minors. Having a trust in place can also make it easier to manage the various income streams to ensure they flow centrally during your life in the way that you intend. Certain trusts can even provide creditor protection, protection from estate disputes, and mismanagement if you become incapacitated. When a trust is created, it is important to think about who will serve as your trustee if you can no longer act, or upon your death. The trustee chosen by you should have familiarity with your intellectual property, royalties, licensing, and the value of your catalogue. Assign Control Over Your Artistic Legacy Do you want your unreleased recordings shared with the world? Should certain songs be licensed for commercials or films? It is essential that you appoint the right person with this level of discretion to answer these questions because they can determine how your music is used after your death. It is, therefore, vital to ensure that the person you assign the control has an understanding of your legacy. This person is often referred to as a “creative executor” or a “creative trustee” who understands your artistic vision and can carry out your wishes regarding issues like posthumous releases, licensing decisions, and the preservation of your work. Digital Assets and Social Media A musician’s online presence can be as valuable as their physical recordings. A properly drafted estate plan will include instructions regarding your social media profiles, your official website, your digital music platforms (Spotify, Apple Music, YouTube channels), and access to each of those platforms. You may direct whether these platforms should remain active as they were during your life, or if you would prefer that they remain active as a memorial or taken down altogether. Business Succession Planning for Bands or Labels If you own a record label, music publishing company, or are part of a band with business agreements, succession planning is critical. Ensure that your partnership agreements address what happens in the event of your death or incapacity and how ownership interests will be transferred or managed. Your operating agreements and shareholder agreements should be reflective of your wishes and must address your particular circumstance; failure to do so allows your state to determine how those interests can be transferred or managed. Plan for Personal Assets and Family Needs Beyond your musical career, you must ensure that you have a traditional estate plan in place that also addresses bequests to your family members and friends, guardianship of your children, and designations of health agents and powers of attorney. If your musical career is successful, you should consider the issue of estate tax and consult with an insurance professional for life insurance policies that could provide economic support for your family or liquidity to pay estate tax. If your music catalog has significant value, proactive estate tax planning is essential. Strategies might include gifting portions of your catalog during your lifetime, setting up irrevocable trusts to shield assets, and working with a valuation expert to determine accurate appraisals for estate tax purposes. Musicians, like most artists, often experience fluctuating incomes, so proper planning is crucial for providing long-term security to loved ones. Final Thoughts Proper planning is the ultimate backstage pass to your legacy. It empowers musicians to control not just the financial aspects of their legacy, but also the integrity and future of their creative works. Without a solid plan, disputes over rights, royalties, and artistic decisions can tarnish the legacy you have worked so hard to build.
August 5, 2025
Franchise Law
Understanding the FDD and Franchise Agreement Before You Invest
Franchise Agreements Are Binding and Often One-Sided Franchise Agreements are typically drafted by the franchisor and presented on a “take it or leave it” basis. These contracts often impose strict controls over how you operate your business — from approved vendors and marketing strategies to pricing, hours of operation, and technology platforms. They also frequently include provisions that: Limit your ability to exit the business without penalties Impose personal guarantees and long-term non-competes Allow the franchisor to raise fees or change system rules unilaterally Require extensive marketing spend and recurring royalty payments, regardless of profitability Once signed, these agreements are legally binding, and courts generally enforce them as written. That’s why it’s critical to understand every term, especially the financial and operational obligations that can continue even if your business underperforms. The FDD Reveals More Than You Think—If You Know Where to Look Federal law requires all franchisors to provide an FDD at least 14 days before you commit to purchasing a franchise. This document includes 23 mandatory items covering everything from fees and restrictions to litigation history and franchisee turnover. Key areas to focus on include: Item Seven (Estimated Initial Investment): Are the start-up costs realistic? Do they include real estate, equipment, training, and working capital Item 19 (Financial Performance Representations): Does the franchisor provide actual revenue or profit data? If not, you’ll need to speak directly with current and former franchisees to assess performance Item 20 (System Growth and Turnover): How many outlets have closed, transferred, or terminated in the past three years? A high rate of turnover may signal problems in the system Location, Location, Location: Real Estate Considerations Matter For brick-and-mortar franchises, securing the appropriate location is mission-critical. But many prospective franchisees underestimate just how complex and time-consuming the real estate process can be. Questions to ask include: Will the franchisor assist with site selection and lease negotiations Does your market have sufficient demand for the service you're offering Have you accounted for construction costs, permitting delays, or the need for tenant improvements Before signing a lease, make sure your site is approved by the franchisor, zoned appropriately, and competitively situated within your target market. Poor location decisions can be fatal, even with a strong brand behind you. Due Diligence Is Not Optional — It’s Essential Even if a franchise system seems successful from the outside, the only way to know whether it’s viable for you is through diligent research. This includes: Contacting five to seven current and former franchisees in similar markets to ask about actual revenue, marketing effectiveness, franchisor support, and break-even timelines Building a financial model that includes royalties, fees, payroll, rent, and realistic revenue assumptions Consulting experienced franchise counsel to identify red flags or possible negotiation points (such as non-compete terms, marketing obligations, or transfer fees) Understand the Fine Print: Non-Competes and Post-Termination Restrictions One of the most overlooked — but potentially harmful — aspects of franchise agreements is the restrictive covenants that survive after your business ends. Most franchise agreements include: In-term and post-term non-compete clauses that prevent you from operating a similar business for up to two years within a certain geographic radius Non-solicitation provisions that restrict contact with former clients, employees, or vendors Injunctive relief and fee-shifting clauses that give the franchisor significant enforcement rights if they believe you’ve violated these obligations These provisions can limit your ability to earn a living in your field if things don’t work out. You must understand exactly what you are agreeing to before committing to the franchise. Franchise Investment Is a Long-Term Commitment Most franchise agreements last between five and 10 years, and renewal isn’t guaranteed. Even if renewal is offered, it often requires signing a new agreement that may include higher fees or stricter obligations. If your situation changes, selling or transferring your franchise may trigger high administrative fees or require franchisor approval. Some agreements even prohibit termination unless certain financial benchmarks are met. No Guarantees of Success Finally, it’s important to remember — buying a franchise is not a guarantee of success. Many franchisors explicitly disclaim responsibility for your profitability, and even those that provide financial data often include broad disclaimers. You bear the operational risk, and in many cases, personal financial risk. Bottom Line: Don’t Buy Blind The decision to invest in a franchise should be driven by facts — not hope, hype, or brand appeal. Review the FDD and Franchise Agreement in full. Speak to other franchisees. Build your own financial model. And don’t move forward until you’ve consulted an attorney who specializes in franchise law. The costs of skipping this step — both financial and emotional — can be far greater than you think.
August 5, 2025
Mergers and Acquisitions
Deal Flow Thawing: Is the M&A Market Finally Finding Its Footing?
After a rocky past six months, there is cautious optimism that merger and acquisition (M&A) activity is beginning to unfreeze. For much of the past year, there have been mismatched expectations around valuations and limited access to capital that have caused activity to stall. According to a recent report by PwC Global, “lending rates have long been one of the two key factors influencing M&A activity, the other being valuations.” So, while buyers were eager and sellers were hopeful, the numbers rarely lined up. But things could now start to change. The Valuation Tug-of-War One of the biggest barriers to getting deals across the finish line has been price. Many sellers have been holding onto lofty valuations based on pre-2022 market highs that simply aren’t realistic today. Meanwhile, buyers, who have been dealing with tighter credit markets and greater scrutiny from lenders, have been laser-focused on the fundamentals. All of this has resulted in a frustrating standoff where deals collapse not due to a lack of interest, but because no one can agree on what the business is truly worth. In fact, earlier this year, Arrowpoint Advisory noted a 26% decline in deal volume in North America, due in large part to “valuation mismatches between buyers and sellers.” We're now seeing a slow realignment. Valuation expectations are coming back to earth, with PwC noting that in today’s uncertain environment, it is important to not overreach on valuations. Deal structures are also evolving to bridge the remaining gaps, with earnouts, seller financing, and rollover equity becoming more common. It is this kind of flexibility that is helping to get deals done. A Shift in Diligence Dynamics Another notable change has been the quality of earnings (QoE) process. Two years ago, it was often a buyer-driven analysis, completed after signing a letter of intent (LOI). Now, many sellers are proactively conducting QoE studies before going to market. It’s a smart move to arm themselves with clean, vetted financials that can help to accelerate buyer confidence and reduce the risk of retrading. But there is a catch. Even with a proactive QoE, once a deal goes under LOI, buyers are digging deeper than ever. Diligence is intense, and the time from LOI to closing can stretch longer than expected. KPMG’s 2025 Deal Market Study points to heightened diligence and risk assessment as top challenges for 52% of corporates and 42% of private equity sponsors in the current economic landscape. And 47% of corporates also pointed to prolonged deal closing timelines as an issue, highlighting the link between deeper diligence and slower transactions. So, by the time due diligence wraps, earnings may have shifted, or market conditions may have changed, sometimes to the point where the lender’s original terms no longer match the reality of the deal. The Capital Crunch is Real, But Not Fatal Banks are still lending, but there is an increased level of caution and a decreased appetite for risk. We’ve seen situations where buyers get a term sheet for, say, $8 million in debt financing, only to find that after diligence or revised financials, the deal no longer pencils out, or the loan size is cut. That kind of late-stage shift can derail even the most promising transaction. That’s why it’s more important than ever to stress-test the deal early. Build in buffers, anticipate lender concerns, and don’t underestimate the importance of aligning everyone (seller, buyer, and lender) on realistic numbers from the start. The M&A market may not be booming, but the ice is cracking as valuations find firmer footing, buyers adapt to longer timelines, and sellers are more prepared. If you're contemplating a transaction on either side, now is the time to get your house in order. Quality of earnings, capital access, transparency, and flexibility will be the make-or-break factors in the deals that get done in the second half of 2025.
August 4, 2025
Bankruptcy
Broadway Realty Ruling Highlights Narrow Scope of Collateral Surcharges
Another bankruptcy court decision shows the skepticism of courts to Chapter 11 debtors’ arguments that they can surcharge a creditor’s collateral to pay extensive administrative expenses, such as professionals’ fees. A decision from Judge Jones in the Southern District of New York emphasizes again, how bankruptcy courts are hesitant to allow such broad surcharge claims under section 506(c) of the Bankruptcy Code. See In re Broadway Realty I Co., LLC, No. 25-11050 (DSJ), 2025 WL 1803089, at *1 (Bankr. S.D.N.Y. June 29, 2025). The decision also dealt with other issues, principally adequate protection in the form of “shared” equity cushions between multiple affiliated debtors. But in addressing 506(c), Judge Jones took issue with a sweeping effort to justify a surcharge of “millions of dollars of professional fees and other administrative expenses” on the theory that the Chapter 11 case generally benefited the secured lender. The debtors, 82 entities which owned a number of multifamily residential rental buildings, filed bankruptcy to block foreclosure actions proceeding in state court. The secured lender contested the debtors’ cash collateral motion, arguing that the proposed expenses depleted its cash collateral without adequate protection. The debtors responded, in part, by arguing that the expenses should not require an adequate protection analysis (or themselves constituted adequate protection) because they benefited the lender’s collateral and therefore could be surcharged under section 506(c). Judge Jones was not convinced. After finding that the lender was not adequately protected by “shared” equity cushions between the debtors, he addressed the surcharge argument. Section 506(c) surcharges, he found, might sometimes be relevant to the question whether a lender is adequately protected for a debtor’s expenditures, but here, the debtors argument that nearly all of its expenditures, including millions of dollars in professionals’ fees, “adequately protected” the lender was overbroad. What made the surcharge attempt particularly egregious in Broadway Realty was the fact that the debtors sought to apply the surcharge “prospectively,” that is, before the administrative expenses were incurred, and that the debtors argued that their ability to pay such expenses then surcharge the collateral, supported a claim that the creditor was adequately protected for the use of its cash collateral. Section 506(c), Judge Jones found, is not intended to serve this purpose, but was intended to apply to expenses already incurred, and was not intended to support an argument of adequate protection. There are two principal takeaways for debtors entering Chapter 11. First, most bankruptcy courts remain hostile to the argument that a secured creditor’s hypothetical benefit from the case can ever justify charging their collateral for the expenses of the case. It’s not simply a matter of crafting a convincing evidentiary showing that the creditor will do better through a Chapter 11 plan or 363 sale, instead, section 506(c) is simply not intended to govern such “broad” benefits, only to justify narrow and specific surcharges for necessary collateral-based expenses. Second, because section 506(c) is retrospective, it can only be invoked after the expenses have been incurred. This, of course, places the risk on the debtor incurring the expense, that it will be seen as a justifying surcharge. It also places the premium on negotiation with the creditor in advance of incurring the expense to mitigate that risk. In reality, if broad administrative expense support is to be sought, the debtor should attempt to do so through a restructuring support agreement or similar arrangement prior to filing the case.
August 1, 2025
Labor and Employment
Sustaining LGBTQ+ Inclusivity: Legal and Workplace Strategies After Pride Month 2025
Pride Month 2025, commemorating the 1969 Stonewall Riots, celebrates the LGBTQ+ community’s contributions, but inclusivity must extend beyond June to foster workplaces where everyone feels valued. Navigating the complex legal landscape — shaped by the Supreme Court’s 2020 Bostock decision, Executive Order (EO) 14173, and the Department of Justice’s (DOJ) Civil Rights Fraud Initiative — requires strategic planning. Cultural dynamics, including employee activism and consumer expectations, further emphasize the need for year-round inclusivity. This blog provides actionable legal and practical strategies to ensure compliance with Title VII, mitigate False Claims Act (FCA) risks, and create psychologically safe workplaces where LGBTQ+ employees can thrive without hiding their identities. Understanding the Legal Framework The Supreme Court’s Bostock v. Clayton County (140 S. Ct. 1731, 2020) decision established that Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sexual orientation and gender identity for employers with 15 or more employees. The Equal Employment Opportunity Commission (EEOC) enforces Title VII, providing guidance on restroom access aligned with gender identity, harassment prevention, and protections against discrimination based on nonconformity to sex-based stereotypes (EEOC Guidance, 2021). However, a May 15, 2025, federal court ruling vacated parts of the EEOC’s harassment guidance, pending appeal. The Eleventh Circuit’s Lange v. Houston County decision underscored the importance of inclusive benefits, holding employers liable for excluding gender-affirming care from health plans. State and local anti-discrimination laws in 25 states, the District of Columbia, and many municipalities, may impose stricter standards or apply to smaller employers. Globally, over 60 countries criminalize same-sex relationships, creating risks for employees on international assignments. EO 14173, signed January 21, 2025, requires federal fund recipients to certify DEI program compliance with anti-discrimination laws, with violations risking FCA liability. The DOJ’s Civil Rights Fraud Initiative, launched May 19, 2025, targets false certifications in DEI programs, such as gender-identity-based restroom policies, using FCA’s treble damages and qui tam provisions. Addressing Workplace Challenges Post-Pride Month Beyond Pride Month, employers must address ongoing challenges to sustain inclusivity. Many LGBTQ+ employees feel pressured to “cover” (hiding aspects of their identity), such as avoiding mention of same-sex partners or gender identity to fit in, which can harm mental wellbeing and productivity. Despite Bostock, harassment over pronouns, dress codes, or benefits persists, risking Title VII claims. Employee activism, often heightened during Pride, may continue as resource groups push for robust inclusion policies. Missteps could lead to union organizing, lawsuits alleging discrimination, or consumer backlash from perceived over or under-support of LGBTQ+ issues. The DOJ’s focus on “unlawful DEI” may prompt some to scale back inclusivity efforts, while religious accommodation requests require careful balancing with Title VII obligations. FCA Defenses: Safeguarding Against DOJ Enforcement The DOJ’s Civil Rights Fraud Initiative frames false DEI compliance certifications as FCA violations, but employers can leverage robust defenses. In United States ex rel. Schutte v. SuperValu Inc. (143 S. Ct. 1391, 2023), the Supreme Court held that FCA liability requires subjective knowledge of noncompliance. Employers who reasonably believed their DEI programs complied with Title VI, Title IX, or Section 1557 — based on legal counsel or ambiguous regulations — can argue they lacked the “scienter” needed for liability. Documenting good-faith compliance efforts strengthens this defense. In Universal Health Services, Inc. v. United States ex rel. Escobar (136 S. Ct. 1989, 2016), the Court required that false certifications materially influence federal payment decisions. If the government knew of DEI practices through audits or continued funding despite disclosures, employers can argue immateriality. The Eleventh Circuit’s Honeyfund.com v. Florida (2023) decision, which invalidated anti-DEI restrictions as First Amendment violations, supports arguments that inclusivity initiatives, like employee resource groups or training, are protected speech. These defenses — good-faith compliance, lack of materiality, and free speech — help mitigate FCA risks when supported by legal counsel. Practical Strategies for Year-Round Inclusivity To sustain inclusivity post-Pride Month while complying with Title VII and mitigating FCA risks, employers can adopt the following strategies to create workplaces where employees feel safe and valued: Update Policies for Clarity and Compliance Revise anti-discrimination policies to explicitly cover sexual orientation and gender identity, aligning with EEOC guidance, state/local laws, and Title VI/IX/Section 1557. Ensure DEI programs avoid assigning benefits by protected characteristics. Support restroom and dress code access aligned with gender identity, offering gender-neutral facilities as a compliance option. Accurately reflect these practices in federal certifications to avoid FCA liability. Offer Voluntary, Inclusive Training Provide voluntary training on preferred pronouns, names, and Title VII compliance to reduce discrimination risks and foster inclusion. Training should be non-segregatory to avoid DOJ scrutiny. Equip HR with de-escalation training to handle identity-based conflicts, creating a psychologically safe environment where employees can be authentic, without fear of judgment. Implement Confidential Reporting Channels Establish confidential reporting mechanisms and thorough investigation processes to address discrimination promptly, preventing workplace hostility and Title VII claims. Swift responses to inappropriate comments, such as those about restroom access, demonstrate a commitment to inclusivity. Support Gender-Affirming Benefits and Accommodations Ensure health plans cover gender-affirming care, compliant with Lange and the Respect for Marriage Act (Pub. L. 117-228). Develop accommodation plans for transitioning employees, ensuring accurate federal certifications. For international assignments, assess destination laws and provide safety protocols for LGBTQ+ employees. Conduct Privileged DEI Reviews Perform privileged reviews of DEI programs and certifications under Title VI/IX/Section 1557, focusing on policies like restroom access that may attract DOJ scrutiny. Document compliance efforts to support Schutte defenses and track payment decisions for Escobar arguments. Foster Inclusive Cultural Observances Extend Pride Month’s spirit by integrating inclusivity into year-round observances, such as decorating contests with rainbow themes or inclusive swag like pens, to foster belonging. Apply consistent, objective criteria to cultural observances (e.g., Pride Month, Black History Month) aligned with company values to avoid FCA risks. Ensure events are voluntary and inclusive, with legal review for sponsorships or displays to address FCA and First Amendment implications. Balance Religious Accommodations Process religious accommodation requests for inclusivity initiatives compliantly, balancing with Title VII duties. Manage conflicts without compromising anti-discrimination policies to maintain a safe workplace for all. Encourage Mentorship and Allyship Promote mentorship programs to support LGBTQ+ employees, fostering career growth and a sense of belonging. Encourage allyship year-round by creating spaces where employees can be open about their identities, reducing the need to cover, and enhance wellbeing. Align Legal, HR, DEI, and PR Teams Coordinate across teams to ensure inclusivity initiatives reflect brand values and risk tolerance. Prepare communication strategies to address employee and consumer sentiment, leveraging Honeyfund arguments for expressive activities. Maintain records of compliance efforts to counter potential FCA claims. Sustaining Inclusivity Beyond Pride Month 2025 Hiding one’s identity to fit in can erode mental wellbeing and limit professional growth. With over 500 anti-LGBTQ+ bills pending and heightened DOJ scrutiny, employers must remain vigilant. By aligning with Title VII, leveraging FCA defenses (Schutte, Escobar, Honeyfund), and fostering psychologically safe environments, employers can create workplaces where authenticity thrives. Legal counsel is essential to navigate Title VII, FCA, and First Amendment complexities, ensuring sustained inclusivity for LGBTQ+ employees year-round.
July 31, 2025
Bankruptcy
The “One Big Beautiful” Bill and the State of AI Regulation
After several weeks of back and forth on a potential 10-year moratorium on state or local AI legislation and regulation enforcement, the final version of the so-called One Big Beautiful Bill Act, signed into law on July 4, 2025 (Pub. L. No. 119-21), abandoned the proposed provision. Accordingly, companies must be alert to and comply with a variety of evolving state and local laws governing the use and deployment of AI tools. In addition, companies that supply AI systems or produce outputs intended for use in the EU are subject to the EU AI Act. Here we will provide a high-level overview of the state laws that are AI-specific (as opposed to regulating use cases or general conduct that might involve AI). Colorado AI Act The Colorado AI Act is scheduled to go into effect on February 1, 2026. It is considered a consumer protection law and imposes obligations on developers and deployers of so-called "high-risk" AI systems "to use reasonable care to avoid algorithmic discrimination in the high-risk system." The law creates a rebuttable presumption that a developer or deployer used reasonable care if they complied with specified provisions in the law. Texas Responsible Artificial Intelligence Governance Act The Texas governor recently signed the Texas Responsible Artificial Intelligence Governance Act, which will become effective on January 1, 2026. It creates a regulatory system for AI development and use, AI disclosure requirements for government agencies, a program that allows AI development with relaxed legal constraints, and an advisory council to analyze AI use and provide recommendations to state agencies. Although it primarily regulates governmental agencies and health care providers, the new law is of relevance to private sector organizations, more generally the new law clarifies that: It is unlawful for any person to use an AI system to intentionally discriminate against individuals based on a protected characteristic, with limited exceptions for certain insurance companies and financial institutions. Showing a disparate impact on a given group is insufficient to demonstrate intentional discrimination. Maine Chatbot Disclosure Law On June 12, 2025, Maine enacted H.P. 1154, a law requiring disclosure of the use of AI chatbots. Under the law, a person may not use an AI chatbot of any other computer technology to engage in trade and commerce with a consumer in a manner that may mislead or deceive a reasonable consumer to believing that the consumer is engaging with a human being, unless the consumer is notified in a clear and conspicuous manner that the consumer is not engaging with a human being. Violation of the law is a violation of the Maine Unfair Trade Practices Act. New York RAISE Act New York state lawmakers passed the groundbreaking Responsible AI Safety and Education Act (RAISE Act) on June 12, 2025. New York will become the first state to impose enforceable AI safety standards on powerful “frontier models” to prevent catastrophic harm by advanced models, if the governor signs off. The law would take effect 90 days after the governor signs the bill. The law applies to AI models with $100M+ compute cost (or $5M+ for certain “distilled” versions) and covers any frontier models developed, deployed, or operated in New York The law imposes on developers, of extremely large-scale AI systems, sweeping transparency and safety obligations. They must develop a safety and security protocol and publish the safety protocols (with limited redactions for trade secrets or security purposes). Any serious incident indicating heightened risk must be reported to state regulators within 72 hours. Businesses must participate in ongoing reassessment of protocols as models evolve. Utah Artificial Intelligence Consumer Protection Amendments On March 27, 2025, Utah Governor Spencer Cox signed S.B. 226, a law governing the use of GenAI in consumer transactions and regulated services. The law: States it is not a defense to violation of any law administered by the State Division of Consumer Protection that AI:made the violative statement, undertook the violative act, or was used in the furtherance of the violation. Requires disclosure for the use of GenAI when:in connection with a consumer transaction, and providing services in a regulated occupation. Establishes a safe harbor for clear and conspicuous disclosure GenAI is used, subject to additional rulemaking specifying forms and methods of disclosure. Allows the Division of Consumer Protection to impose administrative fines of up to $2,500 per violation. Gives courts the power to:declare an act or practice violates the law, issue an injunction for violation, order disgorgement of money received in violation, impose fines of up to $2,500 per violation, plus costs and fees. The law is effective May 7, 2025. EU AI Act The EU AI Act, known as Regulation (EU) 2024/1689, is a comprehensive regulatory framework designed to govern AI systems and the organizations that supply and use them within the EU. It categorizes AI systems based on their risk levels and imposes obligations on providers, importers, distributors, and deployers of AI systems. Compliance deadlines vary, with most provisions applying from August 2, 2026, but some have earlier compliance dates, including: Prohibited AI practices are banned outright from February 2, 2025[1], AI literacy[2] obligations apply from February 2, 2025, GPAI model rules become effective on August 2, 2025, and Penalties, which apply from August 2, 2025, except penalties applicable to GPAI model providers, which apply from August 2, 2026. Rules on high-risk AI systems forming the safety components of products covered by existing EU product safety legislation apply from August 2, 2027. The EU AI Act defines AI systems as machine-based systems designed to operate with varying levels of autonomy and adaptiveness, generating outputs such as predictions, content, recommendations, or decisions that can influence environments. It excludes certain AI systems used for military, defense, national security, and other specific purposes. Organizations must determine their role in the AI supply chain, whether as providers, deployers, distributors, or importers, and comply with the corresponding obligations. Providers must create technical documentation, conduct conformity assessments, and appoint authorized representatives, among other requirements. Deployers must ensure human oversight, monitor AI system performance, and complete fundamental rights impact assessments, if applicable. Distributors must verify compliance with CE marking and conformity declarations and take corrective actions if necessary. Organizations must assess whether their AI systems are high-risk and meet technical requirements, including risk management systems and data governance practices In connection with the upcoming effective date for the general-purpose AI, the European Commission issued guidelines for providers to assess whether their model is a general-purpose AI model. Article 3(63) AI Act defines a ‘general-purpose AI model’ as ‘an AI model, including where such an AI model is trained with a large amount of data using self-supervision at scale, that displays significant generality and is capable of competently performing a wide range of distinct tasks regardless of the way the model is placed on the market and that can be integrated into a variety of downstream systems or applications, except AI models that are used for research, development or prototyping activities before they are placed on the market’. This definition lists, in a general manner, factors that determine whether a model is a general-purpose AI model. Nevertheless, it does not set out specific criteria that potential providers can use to assess whether a model is a general purpose AI model. The specific criteria the commission chose is based on computational power. An indicative criterion for a model to be considered a general-purpose AI model is that its training compute is greater than 1023 FLOP and it can generate language (whether in the form of text2 or audio3), text-to-image or text-to-video. If a general-purpose AI model meets the latter criteria, but does not display significant generality or is not capable of competently performing a wide range of distinct tasks, it is not a general-purpose AI model. Similarly, if a general-purpose AI model does not meet that criterion but, exceptionally, displays significant generality and is capable of competently performing a wide range of distinct tasks, it is a general-purpose AI model. In Conclusion Companies must create a risk-management framework to navigate a complex, evolving patchwork of rules. With compliance deadlines stretching across 2025–2027, organizations must now proactively monitor and adapt to both U.S. mosaic regulation and EU mandates depending on their markets and use cases. Ultimately, treating AI regulation as a dynamic and strategic compliance horizon will be essential to manage legal risk, maintain trust, and sustain innovation in this rapidly evolving landscape. [1] Prohibited AI practices include: Subliminal techniques which can materially distort a person's behavior by impairing their ability to make an informed decision in a way that causes or is reasonably likely to cause them significant harm. Exploiting the vulnerabilities of a person or specific groups of people (for example, due to their age, a disability or economic situation) which can materially distort their behavior in a way that causes or is reasonably likely to cause them significant harm. Social scoring systems based on known, inferred or predicted personality characteristics which causes detrimental or unfavorable treatment that is disproportionate or used in a context unrelated to the context in which the data was originally collected. Risk assessment systems which assess the risk of a person to commit a crime or re-offend (except in support of a human assessment based on verifiable facts). Indiscriminate web-scraping for the purposes of creating or enhancing facial recognition databases. Emotion recognition systems in the workplace or educational institutions (except for medical or safety reasons). Biometric categorization systems used to infer characteristics, such as race, political opinions or religion. Real-time, remote biometric identification systems in publicly accessible spaces for the purpose of law enforcement except (subject to safeguards and within narrow exclusions) searching for victims of abduction, preservation of life and finding suspects of certain criminal activities (as listed in Annex II: criminal offences permitting use of real-time biometric systems). Real time means live or near-live material, to avoid short recording delays circumventing the prohibition. [2] AI literacy is defined as the skills, knowledge and understanding of a deployer or a provider (and other affected persons) to make informed use of AI systems and to be aware of both the opportunities of AI systems and the risks of potential harm. The obligation to take measures to ensure a sufficient level of AI literacy is set out in Article 4.
July 31, 2025
Family Law
Legal and Practical Considerations Before Leaving the Marital Home During Divorce
One of the most common and emotionally charged questions people ask when facing divorce is, “Can —or should— I move out of the marital home before we have an agreement or court order?” The answer isn’t always straightforward. Moving out can have practical, financial, and legal consequences, especially if there are minor children or disputes over property. In most cases, there is no absolute legal requirement to remain in the marital home until an agreement or court order is reached. Adults generally have the right to decide where they live. However, if children are involved leaving without a plan or without understanding the implications may affect custody and parenting time. Courts tend to look at the status quo when making temporary custody decisions. If you move out and the children stay with your spouse, that could set a pattern. In some jurisdictions, one party can ask the court to award temporary exclusive use and possession of the home, especially if children are living there. Moving out doesn’t forfeit your ownership interest, but it can complicate practical issues such as access to documents, personal items, or the ability to oversee the property's condition. If there is domestic violence, threats, or a toxic environment that affects your safety or your children’s safety, moving out may be necessary. In such cases, you should document the reasons why you left and consider seeking a protective order or temporary custody order to clarify parenting arrangements and protect your rights. Your well-being and your children’s well-being always come first. If you have minor children, think carefully. Moving out without taking the children can unintentionally signal to the court that your spouse is the primary caretaker. Moving out with the children without agreement or court order may escalate conflict and may be seen as improper “self-help.” The best approach before moving is to try to reach a temporary written parenting agreement or seek a temporary custody order. Even if you move out, you may still be responsible for paying the mortgage or part of it, contributing to household expenses, and maintaining utilities or insurance. Leaving can also mean taking on the cost of a second household, which may be unsustainable during a pending divorce. If, after weighing these factors, you decide it’s best to move out, you should consult a lawyer and obtain advice, based on your jurisdiction and the specifics of your case. Document your property by making a list —and taking photos— of furniture, valuables, and documents. Secure important records like tax returns, bank statements, insurance documents, passports (take copies so you’re not left without them). Attempt to reach a temporary agreement with your spouse on issues including parenting time, bill payment, and use of property. If you and your spouse can’t agree, you may file a motion for pendente lite (temporary) relief. In such a hearing, the court can decide who stays in the home, who pays certain bills, and sets a temporary custody schedule. These temporary orders maintain stability until the divorce is finalized.
July 28, 2025
Commercial Litigation
Scandal in the Spotlight: When Leadership Fails the Company Code
In my years as a commercial litigator, I have seen several boardroom implosions, but few begin with a Coldplay concert and end with the resignation of the CEO. The now-infamous “kiss cam” moment at Gillette Stadium between Astronomer’s CEO, Andy Byron, and his Chief People Officer, Kristin Cabot, was more than just a passing moment of virality. It was an object lesson on how public conduct can trigger private consequences at the intersection of fiduciary duties, employment contracts, and corporate governance. On July 16, 2025, Byron and Cabot, were caught on camera in a moment of intimate embrace. It seems innocent enough except, they were both married to other people. Their instinctive panicked reaction, as their image was broadcast to more than 50,000 fans was a dead giveaway of illicit conduct and the catalyst for instant virality. One of the concert goers captured the moment and uploaded it to her TikTok account. Within hours, the post had gathered 125 million views. In the following days, Byron was placed on leave, Cabot followed, and Astronomer’s board launched a formal investigation. From a legal standpoint, this incident raises several red flags, including a potential breach of fiduciary duty. As the CEO, Byron is a fiduciary and obligated to always act in Astronomer’s best interest. If Byron’s relationship with Cabot influenced hiring decisions, compensation, or internal investigations, then shareholders have a good-faith basis to allege that Byron breached that fiduciary duty. Another apparent issue is a serious conflict of interest involving Cabot. At its core, a conflict of interest arises when an individual’s personal interest interferes or appears to interfere with their professional obligation. Cabot’s relationship with Byron triggers scrutiny across several areas of corporate risk. As the head of Human Resources, she may have had oversight over such policies on interoffice romantic relationships, a policy that she herself has violated. Additionally, as head of Human Resources, Cabot may have had influence over executive compensation, promotions, or performance evaluations, while engaged in a romantic relationship with an executive. Overall, her behavior does not look good, even if no policies were breached. Conflict of interest is about perception and accountability. Finally, Byron’s conduct raises serious concern about a breach of his employment contract. Many executive employment agreements contain “morality clauses” that allow termination for conduct that brings disrepute to the company. Morality clauses set behavioral expectations for executives who are seen as the face and embodiment of the company. Morality clauses often cover off-duty conduct that could reflect poorly on a company’s brand. A viral cheating scandal arguably qualifies as one. If Byron’s contract contains a morality clause, then the scandal will qualify as a breach event. The board’s swift action, by placing both parties on leave and appointing an interim CEO, suggests it is trying to mitigate reputational and legal exposure. Upon a formal internal investigation, on July 19, 2025, Byron resigned from his position as CEO. Astronomer’s actions following the scandal show a commitment to leader accountability and upholding the company’s best interests. As for Cabot, her continued employment, although on leave, has sparked debate. Terminating an employee in Cabot’s position for “ugly headlines” is not always legally sound. Internal investigations must be thorough, and any termination must be substantiated by documented violations, not just public embarrassment. Overall, this is an important lesson for executives: your personal conduct can have unintended consequences. Executives should be mindful that they represent the image of their companies. And for companies, this is a reminder to revisit employment agreements, update ethics policies, and ensure your crisis response plan does not rely on hope and a hip social media intern.
July 24, 2025
Estates and Trusts
When a Corporate Trustee May Be a Disadvantage for Your Trust
Last month I explored the potential advantages of naming a corporate trustee, acknowledging that the decision is ultimately a matter of personal preference. In this second part of a two-part, “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I take up potential disadvantages and reasons you might consider not naming a corporate trustee to manage your trust. Should you name a financial institution as corporate trustee to manage your trust when you are no longer able to do so for yourself? Whether you name a financial institution to manage your trust assets when you are no longer able to do so for yourself is ultimately a matter of personal preference and choice. In this second part of a two-part, “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I take up potential disadvantages and reasons you might consider not naming a corporate trustee to manage your trust. $$$ - Higher Costs Relying on a financial institution to manage your trust when you are no longer able to do so for yourself generally requires a more substantial commitment to administrative costs. While friends and family might be willing to serve when you’re gone – and frequently agree to do so with no thoughts of compensation (or the time commitment potentially involved!) – no corporate trustee is going to undertake or continue the effort without being adequately compensated. Corporate trustees charge annual fees that typically range from 0.5% to 2% of the trust’s “assets under management,” depending on the size and complexity of the trust. These fees are intended to compensate reasonably for professional services required to manage the assets and administrative responsibilities. In my experience, family members and friends serving as trustees typically charge little or nothing for their trust/asset management efforts, regardless of the discretion afforded to them under the governing trust document(s). The decision whether to exercise this discretion in favor of taking a fee is typically driven on the one hand by a sense of entitlement and, on the other, by an inherent sense of fairness (including an assessment of the likelihood of heartburn and frustration) to be generated by beneficiaries’ uninformed and often unwarranted perception of impropriety occasioned by the resulting imbalance as violative of “equality for all” expectations. To be sure, individual circumstances vary widely, and a family/friend trustee should have no reservations about being reasonably compensated for work that money managers and financial advisors would otherwise be charging a significant sum. Most trusts expressly afford trustees discretionary authority to be compensated for their efforts. And, unless expressly stated in the trust document, Virginia, like most jurisdictions, allows such discretionary compensation by default. Consequently, one can generally expect trust administration costs under a corporate trustee to exceed what an individual trustee might be expected to charge (if anything) for his or her trust management services. It is typical to allow an individual trustee the discretion to take a fee for one’s services. The more substantial the trust, the more time and effort can be expected to monitor and manage – especially if one or more family members have their own expectations (however misguided or unrealistic they may be!) regarding the timing and extent of their inheritance. In my experience, there’s almost always at least one troublemaker beneficiary making things miserable for everyone else – especially the trustee. Lack of Personal Touch Corporate trustees are in the business of managing trusts and, therefore, manage many trusts at once. Consequently, a corporate trustee may not be able to provide the personalized attention that a close family member could. In all fairness, a corporate trustee cannot be expected to understand or appreciate the unique family dynamics or emotional aspects of the trust as well as a family member or close friend could. Perhaps you are in the 1% of those fortunate to have developed a close long-term relationship with a trusted advisor at a corporate trustee and have convinced yourself that no other friend or family member could possibly be trusted to do as good a job carrying out your wishes. I’m not here to talk you out of your blissful naivety, but you owe it to yourself to give due consideration to the probabilities of your trusted advisor dying and how familiar the likely successor(s) is/are with your situation. Less Flexibility Institutional trustees often operate under strict guidelines and may be less flexible or slower to respond than an individual who can make quick, informal decisions. This relative inflexibility stems, at least in part, from a higher likelihood of being held to task in hindsight for decisions which, at the time, may have seemed eminently reasonable. A beneficiary is more likely to attempt to create a legal issue about holding a corporate trustee liable for decisions that, in retrospect, turn out sub-optimally. Consequently, a corporate trustee can be expected to apply a more rigorously conservative approach to investing and discretionary distributions, for instance. Of course, this may be precisely what you’re looking for in a trustee. Alternative Asset Limitations Along with less flexibility in the manner in which they might be expected to make decisions regarding the assets under their management, corporate trustees are oftentimes limited in the asset classes they manage. Precluded from keeping particular types of assets in their portfolio, a chosen corporate trustee may become the tail wagging the proverbial dog when they prove incapable of serving 100% of your trustee needs. For instance, real estate is quite frequently beyond the purview of a corporate trustee. Therefore, if you have substantial “alternative asset” holdings (i.e., beyond the traditional “stocks and bonds,” annuities, and typical financial market holdings such as derivatives), a corporate trustee may not be the right choice for you. On the other hand, the more specialized or unique the holdings, the more likely you will want to try to find a trustee with the needed specialized expertise to manage these alternative assets appropriately. Special circumstances demand special consideration. Just recognize, as well that a corporate trustee with the relevant specialized skill set may not be the best choice to serve as your fiduciary for your other trust assets. And even if they are a potential fit across all of your asset classes, their relative expertise and/or comfort level may require some drafting cooperation to develop and settle on an arrangement with which the corporate trustee can get comfortable. For instance, we recently assisted a blended family in avoiding a potentially very costly legal fight by identifying and working with an independent corporate trustee to develop a settlement trust arrangement, the terms, procedures, and potential liability protections of which the trustee could accept. The new trust arrangement overcame the mutual distrust factors, avoided significant legal fees, and uncertain outcomes. Cooperatively addressing and overcoming the specific corporate fiduciary’s reservations ultimately afforded all of the trust beneficiaries the independent management/oversight they each needed. Final Thoughts I would be dishonoring the legal profession if I did not acknowledge, quite lawyerly, that “it depends!” If you haven’t figured it out yet, there is no one-size-fits-all “right” answer. Everyone’s situation is in some respects unique and people’s risk preferences fall across a full spectrum (from a nihilistic “what do I care? I’ll be dead!” to “I couldn’t possibly do that to my loved ones!”). Choosing a trustee is a deeply personal decision that depends on the size and complexity of your trust, your family situation, and your priorities for administration and oversight. For many, a hybrid approach—naming both a family member and a corporate trustee as co-trustees—offers the best of both worlds: professional management and personal insight. While I can’t possibly speak to my readers’ individual risk preferences, there are clearly certain factors that might lend themselves more favorably to a corporate trustee selection in a given situation. All other things being equal, you may want to consider appointing a corporate trustee in the following circumstances: Your trust is large or complex. There is potential for conflict among beneficiaries. You lack a trustworthy or capable family member to serve. You want to ensure long-term, professional management. The trust includes specialized assets such as real estate, business interests, or significant investments. Before making a final decision, I would encourage you to consult with your estate planning attorney or financial advisor to weigh the pros and cons in your specific situation. After the fact, if you find yourself trying to manage or extricate yourself from inheritance-related entanglements (with or without a trust), you should seriously consider engaging an experienced trust and estates litigator to assist in crafting and implementing an outside-the-box arrangement which might very well result in a third-party, corporate fiduciary as the answer . . . or then again, it might not. I would be glad to offer personal recommendations for an estate planning attorney, financial advisor, or trust and estates litigator, should you be interested. I would also welcome the opportunity to review your situation, provide thoughtful recommendations, and assist with implementation as appropriate. The potential significance and impact of a well-chosen trustee cannot be overstated. In short, there is no “one size fits all” solution, and, simply stated, a corporate trustee may not be right for your situation. A well-chosen trustee (corporate, professional individual, family member, or friend) can provide peace of mind. The wrong trustee choice could mean the dismantling of everything you’ve worked your entire life to accumulate and damn your loved ones to costly and frustrating litigation. Too dark? I wish. Trust management legal issues might account for only a small fraction of trust cases, but the actual percentage is of little or no consequence when 100% of the cases I’ve seen on a continuous basis for over 25 years involve some form of dispute with or over the trustee. “What about a ‘trust protector’ arrangement?” you ask. “Should I be insisting on one of those for my trust?” Next time!
July 24, 2025
Elder Law and Advocacy
Why Caregiving Matters More Than Ever in America
When Bradley Cooper released his new PBS documentary “Caregiving,” he didn’t just share a deeply personal narrative, he opened the door to a long-overdue national reckoning. His story of bathing his father, of holding his hand through cancer, of navigating a healthcare labyrinth with little support resonates because it is all of our stories. Whether we realize it yet or not. Caregiving is the invisible thread that holds my clients — the wealthy and not so wealthy — their families, and their communities together. This essential labor, both paid and unpaid, is finally stepping into the spotlight, demanding recognition, reform, and real support. The Growing Crisis The statistics are irrefutable: for the first time ever, Americans aged 65 and older are set to outnumber their children by 2034. Currently, 23 million care for older adults exceeding the 21 million caring for kids. It is important to note, however, that caregiving occurs at all ages and contributions. No one is immune from caregiving. Financial caregiving responsibilities can begin much earlier for a younger demographic if they are in a better financial position than their aging family members. Added to that, those who are having children later in life now care for their aging parents whom they presumed could help them raise their own young children. Unpaid family caregivers contribute nearly $600 billion worth of labor to the US economy annually, which is larger than the United States Department of Defense budget and a figure soon to hit $900 billion the next decade. Families, who represent the unpaid caregivers, absorb this enormous emotional, financial, and physical burden. As this author has written about in the past, caregivers generally must reduce work hours, give up career opportunities, or quit jobs entirely. These sacrifices lead to lost income, strained mental health, and mounting caregiving debt. Beyond the individual cost, caregiving faces much broader challenges, including the underfunding of resources, a fragmented health care system, policy neglect, and a lack of labor protections for professional caregivers. Millions of Americans, especially women, people of color, and low-income individuals are making impossible choices: career or care. Income or loved one. Sleep or safety. And while the dialogue surrounding caregiving has traditionally been viewed as a women’s or senior issue, it is clear that caregiving now touches every demographic and tax bracket. In fact, the recognition of today’s “Sandwich Generation,” adults caring for aging parents while raising kids, has been a topic of conversation, mostly because of the extreme pressure this generation feels with its caregiving responsibilities: even Gen Z is stepping in as caregivers, often for grandparents and disabled siblings. Most fall into caregiving during a crisis — an accident, a diagnosis, or a fall. Without a plan, the emotional, legal, and financial toll compounds quickly and sometimes in ways that cannot be controlled. Planning in advance provides options that planning during or after a crisis simply does not. The culmination of these issues leaves us all without robust systemic support, defining caregiving as a personal crisis rather than a shared responsibility. However, there is hope, and the way to hold onto that hope is through planning. Take Action Clarify wishes. Encourage your aging loved ones to clarify their wishes. Advance healthcare directives provide caregivers guidance and reduce stress of healthcare and end of life decision making. Ensure your Will or Trust is in place and up-to-date reflecting the beneficiaries chosen by the aging loved one, not by the state. Consider creating an ethical will to share with your family describing your hopes and wishes for their future and lessons you wish to impart long after you are gone. Protect assets. If your loved one’s assets are not infinite, it’s imperative to meet with an elder law attorney who can assess whether or not your loved one will qualify for Medicaid or Veterans benefits in the future to pay for long-term care. Determine if asset protection trusts can help your loved one qualify for benefits or resources in their area. If you still have time, speak with an insurance professional about qualifying for long-term care insurance. Organize roles. Nothing is more important than setting a plan in place. This means determining now who can help your aging loved one and contribute to their caregiving. Dividing and conquering roles like organizing medication, cooking meals, providing transportation to appointments, and managing finances can help caregivers avoid burnout and ensure that talents among all caregivers are utilized. Technology is even being developed to address the need such as software like Hero Generation which can make organization for the caregiver easier. Preserve dignity. Talk to your aging loved one about where they want to live as they age and, perhaps more importantly, where they do not want to live as they age. If your loved one is faced with a life-limiting condition, start the dialogue about what their idea of a “good death” looks like by consulting with organizations like Befriending Death or your local hospice agency. Thoughtful planning keeps care centered around the person’s needs, values, religious, and spiritual beliefs, not just the logistics of the end of their life. As caregivers, there is so much we can do beyond providing the care. We must acknowledge the heavy lift of caregiving: talking about it with family, co-workers, and friends to create community around the experience. We must offer respite to our friends who are caregivers and vote for public policies that support and expand care. And of course, elevate the conversation and share resources to make sure that it is easier for those who come after us. Roslyn Carter wisely said that “...there are only four kinds of people in the world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers." Caregiving is love in action and planning for it is essential. Wherever you are in your own caregiving or care receiving journey, ensuring a plan is in place is essential.
July 23, 2025
Labor and Employment
Travel Bans Are Back – Are Exemptions Possible?
Travel bans are back, with an initial list of 19 countries, and that list may be expanded to include an additional 36 nations. This latest round of travel restrictions find their basis in Presidential Proclamation 10949 “Restricting the Entry of Foreign Nationals To Protect the United States From Foreign Terrorists and Other National Security and Public Safety Threats” which has put in place visa and entry restrictions on citizens of Afghanistan, Burma, Chad, Republic of Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen. The proclamation also adds additional suspension of citizens from Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela as visitors or students. Officials will consider additional restrictions for Egypt. Currently the administration is considering additional restrictions to a larger list of countries including: Angola, Antigua and Barbuda, Benin, Bhutan, Burkina Faso, Cabo Verde, Cambodia, Cameroon, Cote D'Ivoire, Democratic Republic of Congo, Djibouti, Dominica, Ethiopia, Egypt, Gabon, The Gambia, Ghana, Kyrgyzstan, Liberia, Malawi, Mauritania, Niger, Nigeria, Saint Kitts and Nevis, Saint Lucia, Sao Tome and Principe, Senegal, South Sudan, Syria, Tanzania, Tonga, Tuvalu, Uganda, Vanuatu, Zambia, and Zimbabwe. See Trump administration weighs adding 36 countries to travel ban, memo says | Reuters. History Repeating This is not the first set of travel restrictions that we have seen implemented. During the first term of the Trump administration, several travel bans were implemented for a variety of reasons, culminating with COVID-19 travel restrictions. What do the prior travel bans tell us about this latest proclamation? The administration has expanded its travel restrictions to include a broader set of countries, potentially including those that benefit from citizenship-by-investment programs, as well more than 20 African countries. The National Interest Exemption is Back Previous travel bans had allowed for travel in support of specific areas of national interest (NIE), which included crucial infrastructure. Authorities have reinstated the NIE as an option for obtaining an exemption from the travel restrictions. The wording of the current proclamation appears to severely limit NIEs in terms of requirements and processing. The “case by case” language suggests that NIEs will be significantly harder to obtain for individuals affected by the current restrictions. There is currently no procedure for advance application for NIEs; accordingly, they must be requested at an embassy appointment. Applicants must also qualify for the visa they are seeking before the NIE step, which raises the visa interview stakes. Accordingly, significant preparation is recommended for travelers affected by these bans, particularly in terms of visa qualification and NIE qualification. Finally, applicants must be prepared for significant administrative processing as NIEs are reviewed. Applicants seeking NIEs for visa issuance are recommended to consult immigration counsel to conduct an in-depth review of qualifications and supporting evidence. With the 2026 World Cup approaching, we can expect guidance on NIEs to evolve in the coming months.
July 18, 2025
Intellectual Property
Patents and the FDA: Four Critical Considerations Medical Device Companies Must Know to Successfully Introduce New Products into the Market
The intersection of patent strategy and FDA regulatory strategy is a critical consideration for medical device companies. A well-integrated approach can create powerful barriers to entry, strengthen intellectual property (IP) portfolios, reduce risk, and attract investors. This article explores key issues and strategies to ensure your patent and FDA efforts work together effectively. An integrated patent and FDA strategy adds significant value to the business. Many companies focus solely on regulatory approval, overlooking how FDA submissions might affect their patent portfolio or vice versa. A coordinated approach between patent strategy and FDA strategy offers significant benefits to the business: stronger patent protection combined with FDA exclusivity creates complementary barriers to entry for competitors. This enhances your ability to protect innovations and ensures your patent strategy is embedded within the regulatory framework for the product that will be sold. Value for investors or later strategic acquirers is a direct result of an integrated patent and FDA strategy. Four areas where medical device regulation and patent law overlap that must be implemented carefully include: patent coverage in view of FDA submissions, Freedom-To-Operate (FTO) risk, product Labeling and Patent Marking, and patent term extension (PTE). Patent Coverage and FDA Submissions Regulatory submissions often include technical details that can affect patent protection. To avoid premature disclosures and ensure alignment, file patents before submitting your regulatory documents to the FDA. While you may have filed for protection early during the product development process, reassessing the product just before submission is an important step to ensure your patents cover what you are seeking to market in the United States. Patent counsel should certainly have the opportunity to consider the filing documents, in ALL of their detail, to consider new patent filings to augment your patent strategy. This strategy also serves other important purposes, like preventing premature public disclosures (e.g., in 510(k) summaries) that could compromise patent rights. Well-crafted summaries and filing documents could limit the usefulness of the confidential FDA data obtainable via Freedom of Information Act (FOIA) requests. Importantly, this key action ensures consistency between FDA filings and patent claims, avoiding statements that could lead to unenforceability due to inequitable conduct. In other words, saying one thing to the FDA that is inconsistent or contrary to the position you are taking regarding prior art can lead (it has) to a finding by the Court that patents are unenforceable. In addition, products evolve, certainly during development, but even after market introduction. A robust use of continuation patent applications can help maintain adequate protection as the product evolves. There are numerous benefits to considering FDA filings in light of the patent strategy and not doing this simple task is a wasteful use of resources. Talk to your patent counsel! Third-Party Patent Risk and Freedom to Operate (FTO) Patent litigation is prevalent in the medical device industry, and failure to consider your products’ freedom to operate can destroy business value. Before submitting a device for FDA approval, conduct FTO studies to identify potential infringement risks. These should include an analysis of IP related to predicate devices, especially for 510(k) submissions. In addition, understanding patents that cover competitive products is another key step in this process. Avoid using language in FDA submissions that could serve as a roadmap for infringement, such as instructions for use or device descriptions. Carefully drafting these documents is a viable way to limit risk and minimize the disclosure of otherwise proprietary information that is not Germane to the purpose of the FDA submission but might otherwise be important in the third-party patent context. Update FTO studies at key milestones, such as before submitting an investigation device exemption, 510(k), or PMA submissions. This is the best way to minimize patent risk once the product is approved, and the ever-important sales begin. Conducting this analysis based on what your business is authorized to sell in the U.S. is a critical consideration because patent risk only flows from making, selling, using, and importing into the U.S. a product that infringes a valid claim of a U.S. patent. Understanding the patent landscape related to the products that have high revenue generation potential is a required but pragmatic business practice to implement. Product Labeling, Patent Marking and Maximizing Damages Patent marking plays a crucial role in infringement cases. Generally, a patent owner is entitled to damages only after the infringer has been notified—either through a cease-and-desist letter, a lawsuit, or compliance with the patent marking statute. Because the FDA regulates product labeling, companies can implement their patent marking during regulatory submission, and in particular, where product labels are concerned. The U.S. allows for virtual patent marking, where a URL (e.g., mycompany.com/patents) is included on the product label. Once the product receives market clearance with this label, damages can accrue from that point forward. Failing to implement this strategy could delay damage accrual until after a lawsuit or cease-and-desist letter is issued. This can be potentially years after market introduction. A simple URL on a label, submitted with your FDA documents, can make a significant financial difference in your patent infringement case, should you need to file one later. There is no simpler way to increase patent value than to implement patent marking on product labels during the FDA approval process. Patent Term Extension (PTE) for FDA-Regulated Products Patents last 20 years from the date a non-provisional U.S. application is filed. During that time, the patent owner has exclusive rights to the patented invention. Once expired, however, others may freely use the invention. However, certain devices, and Pre-Market Approval (PMA) products specifically, can qualify for up to an additional five years of patent term extension. To be eligible for PTE, the product must have undergone a regulatory review period before it can be commercially marketed. The patent must not have been previously extended, and the application for PTE must be filed within a specific timeframe (typically 60 days) after the product receives regulatory approval. This extended exclusivity can significantly impact revenue. Companies should therefore actively monitor regulatory timelines to ensure the timely filing of patent term extension requests. Carefully consider the most valuable patent for extension because there is only one extension per regulatory approval allowed under the law. And finally, avoid delays during prosecution, such as taking extensions of time to file a response, as each extension of time can reduce the potential extension period. In summary, four things that can maximize business value for your medical device are: Align patent filings with FDA submissions to ensure broad, enforceable claims. Conduct and update FTO studies throughout the product lifecycle. Share FDA submission materials with patent counsel to avoid inconsistencies. Incorporate virtual patent marking into FDA labeling at the earliest possible instance. File for patent term extension when available. A successful medical device launch requires a great deal from a business. A robust patent strategy, integrated with the FDA framework, can only support a successful launch; it will not hinder it. By proactively aligning regulatory and patent efforts, companies can secure stronger protection, reduce risk, and enhance business value.
July 16, 2025
Commercial Litigation
Beyond the Verdict: The Essential Drive of Post-Judgment Discovery
You’ve navigated the complexities of litigation, meticulously built your case, and ultimately secured a judgment. The sense of victory is palpable, and you hold in your hand that seemingly definitive court order. However, it’s crucial to recognize that a judgment alone, in its initial form, is merely a declaration. The true measure of success lies not just in winning the legal battle but in realizing the fruits of that victory through effective execution. This is where the often-underestimated power of post-judgment discovery comes into play. Far too many mistakenly believe that obtaining a judgment marks the finish line. They may pause their efforts, only to discover their hard-won legal triumph remains unfulfilled. The reality is that the initial trial was just the foundational stage. Post-judgment discovery is the critical next phase—the strategic process that transforms a paper victory into tangible recovery. Think of it this way: the judgment establishes your right to a remedy. But to actually achieve that remedy, you need to understand the financial landscape of the judgment debtor—where are their assets located? What is their financial structure? Post-judgment discovery provides the essential intelligence to navigate this terrain effectively, and experienced litigators employ a variety of tools to uncover the necessary information. Among the most essential are interrogatories to the judgment debtor, which compel the debtor to provide sworn answers regarding income, assets, and liabilities. Requests for production of documents follow, demanding supporting financial records such as tax returns, real estate holdings, and bank statements. These are foundational methods for gaining a comprehensive view of the debtor’s financial footprint. If more detail is needed, litigators may conduct depositions of the judgment debtor, placing them under oath and on the record, particularly effective in uncovering inconsistencies or concealed assets. In parallel, subpoenas to third parties—such as banks, employers, or business partners—can provide critical third-party insights into financial matters the debtor may have failed to disclose. Beyond traditional discovery tools, enforcement mechanisms also play a key role. Liens on real and personal property help secure identified assets, while garnishment of wages and bank accounts allows for the direct collection of liquid funds. Turnover orders enable the creditor to obtain specific assets by court mandate, and supplemental proceedings or examinations under oath offer a court-supervised forum for investigating asset location and dissipation. Neglecting this phase is akin to stopping short of your goal after achieving a significant milestone. You possess the potential for a tangible outcome, yet you choose inaction. Don't let the opportunity to collect what you've rightfully earned slip away. While this phase might be perceived by some as less captivating than the courtroom proceedings, for those of us focused on achieving real results for our clients, post-judgment discovery is where the true work of recovery takes place. It's where we convert a theoretical win into a concrete one. So, you have the judgment in hand. But a judicial declaration, standing alone, is not self-executing. In the modern enforcement landscape, the litigant must act affirmatively—armed with both legal tools and strategic intent—to pursue the fruits of litigation. Post-judgment discovery is not a procedural afterthought; it is an indispensable function of modern civil practice. A disciplined, methodical approach—leveraging interrogatories, subpoenas, depositions, and court-sanctioned enforcement—can mean the difference between symbolic success and substantive recovery. The law offers the means; it is the diligent creditor who must bring them to bear.
July 16, 2025
Intellectual Property
Supreme Court to Hear Cox Communications Case on ISP Copyright Liability
On June 30, 2025, the Supreme Court accepted a petition for certiorari brought by Cox Communications, and denied one brought by Sony in the same matter, following the advice of Solicitor General Sauer. The dispute stems from a massive $1 billion copyright infringement verdict against Cox Communications, in which music publishers (including Sony, Universal, and Warner Music, among others) alleged that Cox was liable for the illegal distribution of 10,017 musical works by the ISPs subscribers. The Fourth Circuit previously affirmed a lower court’s ruling that Cox was liable to the plaintiff publishers for contributory infringement, while overturning the lower court’s finding of vicarious liability. As a result, both Cox and Sony filed competing petitions for certiorari seeking clarification from the Supreme Court regarding different aspects of ISP copyright liability. The Supreme Court will review two critical questions that could reshape how internet service providers handle copyright infringement. First, whether an ISP materially contributes to copyright infringement by continuing to provide internet access to particular subscribers after receiving notice that their accounts have been linked to active and ongoing copyright infringement. The Department of Justice noted this ruling creates "substantial tension" with a recent Supreme Court analysis of contributory liability in Twitter v. Taamneh, where the Court found that mere passive provision of services without active assistance doesn't constitute contributory liability. Second, the Court will examine the "circumstances under which a contributory infringer can be held liable for enhanced statutory damages based on a finding of "willful infringement,"" specifically whether knowledge of subscriber infringement alone suffices for a willfulness finding or if the ISP must have reasonably believed its own conduct violated copyright law. The decision could fundamentally alter how ISPs manage their networks and respond to copyright infringement notices, with Cox arguing that overly broad liability standards could jeopardize internet access for all Americans. Depending on the outcome of this case, American internet users may see ISPs tighten their grip when enforcing against pirate websites or unauthorized distributors of IP, as ISPs aim to minimize any and all liability potential. We will continue to keep this space updated as the case progresses.
July 11, 2025
Labor and Employment
H.R.1 Ends Taxes on Tips & Overtime: Employer Guide
On July 4, 2025, President Donald J. Trump signed H.R.1—the One Big Beautiful Bill Act—into law following its narrow passage in the House of Representatives just days earlier. Touted as the Trump administration’s marquee legislative victory ahead of the 2026 midterms, the Act makes headlines for many reasons. But for employers, two provisions demand immediate attention: A new above-the-line tax deduction for qualified tip income, and A new above-the-line tax deduction for qualified overtime compensation. Both provisions are now law and will take effect starting with the 2025 tax year, bringing new complexities to wage practices, payroll reporting, and compensation strategy. Below is a summary of the legal and practical considerations employers need to know. "No Tax on Tips:" Tax Deduction for Employees Receiving Qualified Tip Income Section 70201 of the Act allows certain employees to deduct up to $25,000 annually in qualifying tip income. The deduction is aimed at hospitality and service industry workers, but its implementation raises numerous legal and compliance considerations for employers. Key Requirements Eligibility Cap: Deduction phases out beginning at $150,000 in modified AGI ($300,000 for joint returns). Qualified tips must:be voluntarily paid by the customer (not mandatory service charges or auto-gratuities), be paid in cash, by card, or through valid tip-sharing arrangements, and be received in a qualifying occupation that customarily and regularly receives tips as of December 31, 2024.The Treasury must publish a definitive list of qualifying occupations within 90 days. Excluded Occupations: Employees in law, accounting, finance, consulting, performing arts, and similar professions are categorically excluded from eligibility. Reporting Requirements Employers must report:Total cash tips received by the employee on Form W-2. The employee’s qualifying occupation (2025 approximations allowed, subject to Treasury guidance). Employer Risks and Considerations Mischaracterization of wages as tips to secure a tax advantage may trigger IRS enforcement or wage-hour liability. Employers may consider changes to tip pooling or customer-facing tipping practices, but must:remain compliant with FLSA tip pool rules, including exclusion of managers and supervisors, avoid coercing tipping in non-traditional settings where it was not previously customary, ensure 100% tip reporting is enforced among employees. Until the Treasury issues regulations and the occupation list, employers should avoid restructuring wages to exploit this provision. "No Tax on Overtime:" Deduction for Federally Mandated Overtime Compensation Section 70202 of the Act allows employees to deduct up to $12,500 ($25,000 for joint filers) in FLSA-required overtime compensation. This deduction is limited in scope but may prompt employers to rethink how overtime is classified and compensated. Qualified Overtime Compensation Applies only to overtime required under Section 7 of the FLSA (i.e., 1.5x pay for hours over 40 per week). Does not apply to:Overtime required only by state law (e.g., California’s daily overtime rules). Overtime paid voluntarily under employer policy or collective bargaining agreements. Payments already claimed as qualified tips. Reporting Requirements Employers must separately report qualified overtime compensation on Form W-2.For 2025, approximations are permitted under a reasonable method (to be defined by the Treasury). Compliance Risks With this new deduction, employers may be tempted to reengineer pay practices. However, doing so carries significant legal exposure: Example 1: Reclassifying salaried exempt employees as nonexempt hourly employees, lowering base pay, and inflating overtime hours to maintain prior salary levels = FLSA violation if hours are not actually worked and accurately tracked. Example 2: Reducing regular hourly rates for nonexempt employees while creating artificial overtime (e.g., setting an internal 30-hour threshold or applying double-time bonuses) = disallowed, as only FLSA-mandated overtime premiums qualify for the deduction. The Treasury is authorized to issue regulations preventing abuse and wage reclassification. Employers who attempt to engineer “deductible overtime” without strict compliance will face regulatory scrutiny. Practical Employer Guidance The “no tax on tips” and “no tax on overtime” provisions will likely be popular with employees and heavily publicized during the 2025 W-2 season. But for employers, the changes bring regulatory complexity, legal risk, and potential downstream litigation. What Employers Should Do Now Do not alter compensation structures prematurely.Wait for Treasury regulations, especially the occupational list for tip eligibility. Ensure accurate wage and hour records.All overtime-eligible employees must have their hours and regular rates carefully documented. Audit tip pool arrangements and ensure FLSA compliance.Exclude ineligible participants, properly allocate tips, and enforce reporting discipline. Prepare to update payroll systems.New W-2 fields for tip and overtime breakdowns will require reconfiguration. Long-Term Strategy Employers considering reclassification of exempt employees, modification of pay rates, or introduction of creative incentive structures should engage qualified employment counsel. Wage-hour compliance and federal tax strategy must be aligned to avoid triggering enforcement by the IRS, DOL, or plaintiffs’ attorneys. Final Thoughts The tax benefits of H.R.1 may create new incentives for employees, but they also present a compliance minefield for employers. The risk of misclassification, improper reporting, or wage-hour violations is high, especially as employers rush to leverage perceived tax advantages. Employers seeking to responsibly explore compensation adjustments in light of the “no tax on tips” and “no tax on overtime” deductions should consult with legal counsel familiar with FLSA compliance, payroll tax reporting, and employee classification issues. Our labor and employment team is actively advising clients on how to navigate H.R.1's implementation. Contact us to schedule a strategy session or compliance audit.
July 10, 2025
Estates and Trusts
Ashes to Ashes: Making Your Final Arrangements
William Wordsworth said that the best part of a good man's life is “his little nameless unremembered acts of kindness and of love." In this spirit, many of us work to fill each page of our life’s story with small deeds of compassion and helpfulness. One such deed we might not have considered is planning our final farewell. Anyone who has arranged a funeral knows what a challenge it can be. A funeral is the one event where the guest of honor has no say in what it should look like, where it should take place, or who should have a role to play—unless he or she plans ahead. Providing even a brief outline of your wishes is an enormous act of kindness to the people you leave behind. And this is one aspect of estate planning that doesn’t require a lawyer. There are documents a lawyer should draft. These include a will, Durable Power of Attorney, and Advance Medical Directive. But a statement of your funeral and burial preferences is one you can prepare on your own. When kept with your other important papers, these final instructions will ensure that your sendoff reflects your preferences and beliefs. Gone are the days when a funeral was almost always in a house of worship and the burial was invariably at a cemetery. In an increasingly secular society, many funerals and memorial services no longer include a religious component. And as cremation has become more popular, the person’s remains can be disposed of in any number of meaningful ways. What should your funeral look like? The decisions to be made are many and include: what funeral home to use, what kind of service you want, and whether you prefer a traditional burial or cremation. The service could include your favorite readings—whether sacred or secular—hymns, songs, or other music, and the names of loved ones who should play a part in the service. If your remains are to be present, the service is a funeral; if not, it’s a memorial service. Either way, you can name the people who are closest to you to act as actual or honorary pallbearers. If your remains are to be cremated, what should be done with the ashes? Those who desire a permanent resting place can purchase a columbarium niche to house the urn. But scattering the ashes at a meaningful location is another, less costly, option. Ashes can be scattered on the grounds of a private home that belongs to you or your next of kin, on the graves of beloved ancestors, or in a favorite body of water. Some cemeteries even have gardens specifically for scattering ashes. Ashes are not considered to be environmentally harmful, but check to make sure that your plans for disposing of them are legal. If the location is on land belonging to the government or a private party, you may need to get their written permission. Under the Clean Water Act, cremated remains must be scattered at least three nautical miles from land. The Maryland Department of Natural Resources prohibits disposing of ashes in the Chesapeake Bay within seven miles of shore. For inland waterways, you may need to obtain a permit from a state agency. Biodegradable urns are available for burials at sea; otherwise, the urn must be emptied into the water and disposed of separately (or saved as a keepsake). Whatever your wishes, get them down on paper, sign and date the document, and keep it with your important papers. As much as any bequest, this simple act of kindness will be a gift to those you leave behind.
July 10, 2025
Business
Business Tax Law Provisions of the OBBBA
The business tax provisions of the One Big Beautiful Bill Act (OBBBA), as signed by the president on July 4, reflect sweeping changes aimed at incentivizing small businesses, domestic investment, and manufacturing. Outlined below are key provisions of the bill that may impact your business. Extension and Enhancement of Immediate Expensing 100% Immediate Expensing for Qualified Property OBBA permanently reinstates 100% bonus depreciation for eligible business property acquired after January 19, 2025. Immediate Deduction for Domestic Research and Experimental Expenditures Immediate expensing of domestic research and experimental expenditures is now permanent, with an election to amortize certain expenditures. Permanent Small Business Deduction (Section 199A) Section 199A Deduction Made Permanent The 20% deduction for qualified business income (QBI) for pass-through entities is made permanent. The deduction remains at 20%, with expanded phase-in thresholds and an inflation-adjusted minimum deduction for taxpayers with at least $1,000 of qualifying income from active trades or businesses. Increased Expensing for Depreciable Business Assets Section 179 Expensing Limits Raised The maximum amount a taxpayer may expense under Section 179 is increased to $2.5 million, with a phase-out threshold of $4 million, both indexed for inflation. Modification of Business Interest Deduction Business Interest Expense Deduction Expanded The calculation of adjusted taxable income (ATI) for business interest deduction purposes is permanently based on EBITDA, increasing the amount of deductible business interest. Special Depreciation Allowance for Production Property Immediate Deduction for Qualified Production Property Businesses may elect a 100% bonus depreciation deduction for qualified production property placed in service after enactment and before January 1, 2031. Renewal and Enhancement of Opportunity Zones Second Round of Opportunity Zones (OZs) A new round of Opportunity Zones is created, with at least 33% of OZs designated as rural. Enhanced benefits for rural Qualified Opportunity Funds (RQOFs) are included, with a 30% step-up in basis after five years. Expanded Low-Income Housing and New Markets Tax Credits Low-Income Housing Tax Credit (LIHTC) Reforms The state housing credit ceiling is temporarily restored and increased for 2026–2029. Permanent Extension of New Markets Tax Credit (NMTC) The NMTC is made permanent, with a five-year carryover of unused limitation. Permanent Excess Business Loss Limitation Excess Business Loss (EBL) Rules Made Permanent The limitation on excess business losses for noncorporate taxpayers is permanent, with carryforwards treated as net operating losses (NOLs). Estate and Gift Tax Exemption Increased and Made Permanent The estate and lifetime gift tax exemption is permanently set at $15 million for single filers ($30 million for married couples), indexed for inflation. State and Local Tax (SALT) Deduction Changes The SALT deduction cap is temporarily increased for 2025 to $40,000 ($20,000 for married filing separately), with a permanent increase to $40,400 starting in 2026, subject to income limitations and phase-outs. For taxable years beginning after December 31, 2029, the limitation reverts to $10,000. Section 707(a)(2) Partnership Changes Allocations and distributions from partnerships that are, in substance, payments for property or services are now treated as such, rather than as allocations and distributions from a partnership to a partner. This codifies the disguised sale rules without reliance on regulations and applies to services performed and property transferred after enactment. The following “Quick at a Glance” table distills each major OBBBA business‑tax change into a concise, one‑line summary of its scope, benefits, and effective dates. SUMMARY TABLE: Major OBBBA Business Tax Provisions (as Amended) Provision Key Change/Benefit 100% Bonus Depreciation Permanent for eligible property. Section 179 Expensing $2.5M limit, $4M phase-out, indexed. Section 199A Deduction Permanent at 20%, broader phase-in, inflation-adjusted minimum. Business Interest Deduction Permanent EBITDA basis. Opportunity Zones New round, rural focus, enhanced rural benefits. LIHTC/NMTC Increased/extended, NMTC permanent, rural/Indian prioritization. Excess Business Loss Limit Permanent, NOL carryforward. Estate & Gift Tax Exemption $15M/$30M, indexed. SALT Deduction Cap increased to $40,000/$40,400, reverts to $10,000 after 2029. Section 707(a)(2) Disguised sale rules codified, applies to property/services after enactment.
July 8, 2025
Commercial Litigation
Three Things to Know About Notices to Admit in New York
In New York litigation, a well-timed notice to admit can sharpen the issues, trim trial time, and lock in key facts. But it’s a tool that must be used strategically. When used correctly, it can streamline document authentication, conclusively establish undisputed facts, and even support dispositive motions. Misused, however, it risks time-consuming objections or outright rejection. Below are three things every litigator should know about how (and how not) to use a notice to admit. A notice to admit can streamline the facts to be proven at trial. The notice to admit can serve as a device for proving a fact that would be readily admittable at trial. For instance, if the case centers on a vehicle, a notice to admit may be preferable for establishing the owner of the vehicle rather than requiring a party to present documents and facts at trial to establish that “readily admittable” fact. However, the notice to admit cannot serve as a device to require the other party to admit anything that resembles a legal conclusion. For instance, a notice to admit cannot ask a party to admit negligence, breach of a contract, or fraud. New York law prohibits a notice to admit being used “to cover ultimate conclusion, which can only be made after a full and complete trial.” Similarly, it cannot seek admission of facts that require an expert witness. A notice to admit can also be used to establish facts that are public knowledge or facts which the requesting party reasonably believes are not in dispute. Accordingly, a requesting party will overstep the bounds of a notice to admit when seeking admission of a fact that is in dispute. A notice to admit is effective for preparing documents to be admitted into evidence at trial. In a notice to admit, a party may seek another party to admit that a specific document is authentic, that a copy of a document is accurate to the original, establish that a document is a business record (and thus potentially admissible as an exception to the hearsay rule under CPLR 4518), and authenticate a signature on a document. These admissions can result in saving a substantial amount of resources at trial, as it obviates the need for a witness to testify as to each of those elements. Depending on the volume of documents that will be presented at trial, using a notice to admit rather than testimony could save numerous hours of trial testimony, making it a more economical approach but also keeping the trial concise and to the point. A well-considered notice to admit can also ask for admission of facts that serve as the foundation for establishing a chain of custody for evidence, that a document is a business record, or potentially authenticate a document altogether. From this standpoint, for documents where the provenance is established, the notice to admit should be a straightforward and uncontroversial component of the case. Admitted facts can be used not only at trial but at the motion to dismiss or motion for summary judgment stage of litigation. Facts admitted in response to a notice to admit (or admitted because no response was timely submitted to the notice to admit) can be used at several phases of litigation: trial, summary judgment, or motion to dismiss. This reinforces the fact that a notice to admit should be considered at every stage of litigation. Although the facts admitted may not, on their own, be enough to dispose of the case, the facts admitted may serve as a foundation for other arguments that support disposing of the case and should therefore be thoroughly considered. Furthermore, a fact admitted in the context of a notice to admit has a stronger effect than statements made during a deposition or in response to an interrogatory, as the admission is conclusive and precludes denial unless a court allows the admission to be amended or withdrawn. By contrast, deposition testimony or a response to an interrogatory may be rebutted with contrary proof at trial. Therefore, even if the admitted facts do not dispose of the case at the motion stage, the admitted facts still may have a significant impact on the trial. Conclusion Notices to admit are a powerful but often underutilized tool in New York litigation. When drafted thoughtfully and within proper bounds, they can simplify trials, reduce costs, and strengthen pretrial motions. By focusing on undisputed facts and avoiding legal conclusions, attorneys can use notices to admit to gain strategic advantages at every stage of a case.
July 7, 2025
Business
Maryland’s Sales Tax on IT Services: Key Insights and Compliance Tips
As part of its 2025 Budget Reconciliation and Financing Act, Maryland is introducing a 3% sales and use tax on a broad range of information technology (IT) services, effective July 1, 2025.[1] This “tech tax” is designed to modernize the state’s tax base and capture revenue from the rapidly expanding digital economy. The new law will impact service providers and purchasers across sectors, requiring careful attention to compliance and timely updates to accounting and billing systems. Scope of the New Tax The tax applies to IT and data services classified under specific North American Industry Classification System (NAICS) codes: 518 (data processing, hosting, and related services), 519 (web search portals, libraries, archives, and other information services), 5415 (computer systems design and related services), and 5132 (software publishing services). Covered services include cloud storage, web and server hosting, SaaS offerings, IT consulting, custom software development, and more.[2] Notably, the law eliminates the prior exemption for custom software and related services, meaning that even fully customized solutions, regardless of delivery method, are now taxable.[3] The tax rate is set at 3%, unless the service qualifies as a digital product or tangible personal property, in which case the standard 6% rate applies. Clarifications from Maryland Technical Bulletin No. 56 Maryland Technical Bulletin No. 56, published June 10, 2025, provides essential clarifications on the new sales and use tax for IT services. The Bulletin explicitly states that taxability is determined by the nature of the service provided, not the primary NAICS code reported by the business for federal or state income tax purposes. Each service must be evaluated individually against the NAICS activity descriptions for data or IT services and software publishing as defined by Maryland law.[4] For example, even if a business’s primary NAICS code is not one of the specified codes, any services it provides that fall under NAICS sectors 518, 519, 5415, or 5132 are subject to the 3% tax. Similarly, the NAICS code listed in a procurement contract is not determinative; taxability is based on the actual service provided.[5] The Bulletin also clarifies that the tax applies to internal services provided by one affiliated company to another, even if provided at cost, unless a specific exemption applies. Regarding timing, the Bulletin explains that for subscription-based services, each payment after July 1, 2025, is considered a separate sale and is taxable. However, installment or credit sales where the contract was executed before July 1, 2025, are generally not taxable, even if payments are made or services are delivered after that date.[6] Change orders expanding the scope of services after July 1, 2025, are considered new sales and are taxable.[7] Compliance and Exemptions Businesses must register for a Sales and Use Tax (SUT) license and prepare to collect and remit the new tax. The law provides exemptions for certain research and development contracts, such as those involving the University of Maryland’s Discovery District and its quantum computing partners.[8] Additionally, for services used simultaneously in multiple jurisdictions, buyers can provide a Multiple Points of Use (MPU) certificate, shifting the tax remittance responsibility to the buyer, who must apportion the tax based on Maryland usage.[9] Impact and Next Steps Maryland’s new tax on IT services marks a significant shift in the state’s approach to taxing the digital economy. It is expected to increase costs for both providers and purchasers of IT services, particularly in the technology, finance, and government contracting sectors. Businesses should review their service offerings, update compliance protocols, and use guidance from the Comptroller’s Office to ensure smooth implementation. Key Takeaways Effective Date: July 1, 2025 Tax Rate: 3% on qualifying IT and data services Covered Services: NAICS 518, 519, 5415, and 5132 Clarifications: Taxability determined by service, not business NAICS code; applies to internal and affiliate transactions; timing rules clarified for subscriptions, installments, and change orders. Compliance: Register for SUT license, review service offerings, and prepare to collect/remit tax. Exemptions: Research contracts with University of Maryland Discovery District; MPU certificates for multi-jurisdictional use. By proactively addressing these changes, businesses can minimize disruption and ensure compliance with Maryland’s new sales tax on information technology services. [1] “Budget Reconciliation and Financing Act of 2025” (“BRFA”), H.B. 325, 2025 Leg. Sess. (Md. 2025). [2] Comptroller of Maryland, Sales and Use Tax on Data or Information Technology Services and Software Publishing Services: Questions and Answers, Tax Bulletin No. 56 (June 10, 2025) (the “Maryland Technical Bulletin No. 56”). [3] See Maryland Technical Bulletin No. 56 para I. A. 7. [4] See Maryland Technical Bulletin No. 56 [5] See Maryland Technical Bulletin No. 56 Q&A I. A. 2. [6] See Maryland Technical Bulletin No. 56 Q&A II. C. 13. and 14. [7] See Maryland Technical Bulletin No. 56 Q&A II. C. 16. [8] See Maryland Technical Bulletin No. 56 Q&A III. B. 27. [9] See Maryland Technical Bulletin No. 56 Q&A III. C.
July 1, 2025
Family Law
Privacy, Public Image, and Legal Strategy in Celebrity Divorces
When celebrity couples divorce, the public follows the drama with the same intensity as a red-carpet premiere. Yet behind the headlines are important lessons about the delicate balance between privacy, public image, and sound legal strategy—especially when clients live under a microscope. Celebrity clients are brands. Their business interests, endorsement deals, and future earning potential can hinge on how their divorce is perceived by the public. As legal counsel, we must weave reputation management into every legal decision—from the timing of filings to the phrasing of public statements, to courtroom demeanor, and even potential warding off of gossip outlets from incorrectly spinning the narrative. As a family lawyer practicing in New York and New Jersey, I’ve both followed celebrity divorces and represented public figures. While there are many takeaways, for clients in the public eye, privacy isn’t just a preference. It’s a key part of the legal strategy. Privacy Is a Legal and Strategic Asset Joe Jonas’s and Sophie Turner’s divorce became global tabloid fodder. What began as a Florida divorce filing escalated into federal litigation when Ms. Turner claimed that Mr. Jonas had wrongfully removed their children from the United Kingdom. A media frenzy ensued, magnified by her public outings with Taylor Swift, a former Jonas partner. Despite having a prenuptial agreement and eventually reaching a confidential settlement,the couple endured severe public scrutiny. Their case underscores the strategic value of privacy-preserving mechanisms: strong non-disclosure clauses, sealed filings, private judging, and mediation over litigation. A public filing can spiral fast. Counsel should always explore alternatives that shield sensitive matters from public consumption. Public Image and Legal Outcomes Are Intertwined Kevin Costner and Christine Baumgartner’s contentious split made headlines not just for the numbers—she reportedly sought $248,000 in monthly child support—but for the tone. The case sparked media debates over lifestyle expectations, motives, and personal relationships. Ultimately, the court awarded less than half the requested amount, and the couple’s prenuptial agreement significantly shaped the resolution. What mattered wasn’t just the law,it was the public narrative. Media coverage heavily influenced public sentiment and, arguably, the legal posture of both parties. For attorneys, it serves as a reminder that in high-profile cases, public perception often aligns with, and sometimes precedes legal strategy. Social Media Is the New Courtroom When Britney Spears and Sam Asghari’s marriage ended in 2023, legal documents played second fiddle to social media speculation. Instagram posts, anonymous “sources,” and cryptic captions fueled widespread rumors. Although their prenuptial agreement guided a swift financial settlement, public narratives spun far beyond the facts. For attorneys, digital platforms introduce new vulnerabilities. Social media can jeopardize confidentiality, erode legal positioning, and fan the flames of conflict. Today, we must counsel clients on digital discretion,often in the initial consultation. Consider integrating social media clauses into engagement letters and encourage clients to pause or limit online activity until proceedings conclude. Strong Prenuptial Agreements Limit Conflict In contrast to some messy public splits, Sofia Vergara and Joe Manganiello’s 2023 separation unfolded with minimal drama, thanks in part to a robust prenuptial agreement. Though high-profile, their divorce has remained relatively quiet—no drawn-out disputes, no major media spectacle. A sharp contrast is Angelina Jolie and Brad Pitt’s still-ongoing legal battles. For clients of all financial levels, especially those entering second marriages or high-net-worth unions, a well-crafted prenup provides clarity and reduces conflict. It sets expectations, simplifies asset division, and, most importantly, preserves dignity. International Elements Complicate Everything Shakira and Gerard Piqué’s breakup, though not a divorce, exemplifies the complexity of international family law. Their custody negotiations involved multiple countries, tax jurisdictions, and cross-border parenting issues—all while facing intense media attention. Notably, they managed to resolve custody matters privately and amicably, without involving the court. Their approach illustrates the importance of clear, enforceable agreements—especially when children and multiple jurisdictions are involved. For lawyers, global cases demand coordination with foreign counsel, tax advisors, and translators. Early identification of international legal issues—such as passport control, travel restrictions, and Hague Convention risks—is essential. Unapproved relocations or custody changes can lead to serious legal consequences. Lessons from the Spotlight Celebrity divorces amplify the same tensions present in many high-conflict separations,just with brighter lights and louder headlines. But they also offer valuable guidance: Prioritize Privacy: Strong confidentiality clauses and alternative dispute mechanisms can shield clients from public fallout. Manage Reputation Strategically: Legal decisions have PR consequences; coordinate with media professionals early. Integrate Social Media Protocols: Digital missteps can derail even the best legal strategies. Leverage a Strong Prenuptial Agreement: Well-drafted agreements prevent costly, public battles. Plan for International Complexities: Jurisdiction matters. So do passports, treaties, and global tax laws. Promote Dignity Over Drama: The emotional cost of conflict often outweighs the financial one. Celebrity divorces are messy, dramatic, and endlessly dissected. But behind the paparazzi and public statements are real people navigating loss, transition, and legal complexity. For attorneys, these cases offer enduring lessons—reminders that in the pursuit of justice, strategy must go hand-in-hand with empathy and discretion.
July 1, 2025
M&A Nuggets
M&A Nugget: Smart Moves During an M&A Slowdown - Strategic Preparation for Business Owners
Although there are always segments of the M&A market that are busy, most advisors will tell you that there is a current slowdown in overall M&A activity. This gives sellers an opportune time to conduct “spring cleaning.” Just like the stock market, the M&A market ebbs and flows, and it is important that owners be prepared for the next M&A market flow. Here are a few steps you can take to be ready: Update Corporate Records – Make sure that ownership certificates reflect the current ownership of your business and that all required corporate documents exist. Consider implementing incentive plans to retain your key employees, which will help to drive the growth, value, and ultimate purchase price for your business. Review the classification of your business’s personnel between W-2 employees and independent contractors - always a hot-button issue with acquirers. Conduct an audit to ensure that your immigration documentation for employees is current and in compliance with the law. Review or have your CPA review the company’s compliance with sales tax rules to make sure that the company is filing sales tax returns and paying sales tax, where and when required. All of the above items, and many more, will be thoroughly investigated by any acquirer. By conducting spring cleaning now and arranging your business house to be in order, you will be steps ahead when the tempo of the M&A market picks up.
June 30, 2025
Intellectual Property
When to Patent: Common Mistakes Business Leaders Make
Suppose a newly hired engineer on your team sketches a promising new concept for a health monitor in a notebook. Excited by the idea, you loop in marketing, and soon, your company is promoting the product’s features through emails, vlogs, and website posts. The sales team runs with it, offering the product to customers even though the device isn’t fully developed. Meanwhile, you start seeking investors, sharing pitch decks that highlight the product’s potential, projected revenues, and market opportunity. Then comes the first investor call. The question is immediate: “Is it protected?” You haven’t filed a patent, but you sidestep the question and end the conversation. Only then do you call your patent counsel. After hearing the story, their response is sobering: “Much of the damage is already done. We may not have a strong path to protection.” What went wrong? In short, you missed the critical window to file a patent application—after the concept was created but before any public disclosure or marketing. That single misstep may have cost you your ability to secure patent rights. But in reality, a sketch alone usually isn’t enough to file a strong application. So what should have happened instead? When is the Right Time to File for Patent Protection? Knowing when to file for patent protection is critical. Filing too late, as described above, and you risk losing key rights or losing the patent race to your competition. File too early, before there is a business case or before further concept development, and you may not have all the details needed to secure quality patent rights. Filing the right patent applications at the right time transforms your patent portfolio into a high-return investment that protects your competitive edge and supports your next phase of growth. The ideal time would be: Before You Go Public To preserve your rights—in the United States and especially in international markets—it is critical to file for patent protection before your invention is made public, especially in the way it is “made public,” as in the example described above. U.S. law bars the grant of patents for inventions that are patented, described in a printed publication, in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention. 35 USC § 102(a). Thus, the first stage of review should occur before emails, vlogs, posts on your website, and publications about the product are created. Indeed, these publicity-raising tactics are all things that potentially bar patent rights. Even offering your invention for sale, with a price term and quantity, to customers, as in the scenario above, is sufficient to invoke this provision of patent law, which prohibits securing patent protection in the future for the product sold. Finding a mechanism to alter or delay publication or offer for sale is a critical aspect of a patent strategy that can help preserve patent rights, which any business should implement. In short, any activity that includes publishing, pitching, selling, presenting at a conference, or even demonstrating your invention in public or a non-confidential setting can cause harm to your patent strategy. Despite the bars to patent described, U.S. law grants innovators some exceptions to this rule, such as the inventors’ own work, if made within one year of filing for protection. For example, should an inventor publish the invention in some form, you have one year to file patent protection to avoid losing those patent rights. However, this can be risky, as you often do not know what your competitors may be working on or even if they have completed a patent filing within that one-year timeframe. Additionally, should an inventor share the invention with a third party, such as a potential investor or supplier, there is a risk that the third party could file for its own protection for the concept before you do. They could even combine that shared content with their work, making it difficult for you to secure patents. While there are some provisions under U.S. law to sort this out, for example through derivation proceedings, these complex procedures can be avoided by filing for patent protection before sharing the invention with any third party, as in our example above. When It’s More Than an Idea A completed product that is ready for marketing and manufacturing is sufficient and ready for patenting. Mere concepts and ideas are often not enough to secure quality patent rights. Patent law requires an enabled, written description of the invention, along with patent claims that specifically set out the scope of the invention. This often demands a reasonable level of detail of the invention, its working principle, and a description of various alternatives that might be used in the future by the market you are planning to serve through your business. There is no requirement to submit a working model or software code for software-related inventions, for example. However, there is a need to include reasonable details related to the invention and alternatives, so that meaningful patent protection can be secured. The objective is to do more than merely describe the conceptual goals of the product; details matter here as you and your patent counsel will want to rely on passages of the patent text to craft the desired patent claims during the prosecution of the patent application in the future. This ensures that you can cover the technology you are developing and also address competitive threats through amendments to the claims as needed. Without details in the patent application that anticipates what might happen in the future regarding the underlying products, your options for securing meaningful patent protection are limited, if not barred altogether. Conclusion So when do you file for protection? In our example above, a significant amount of engineering and development remains in order to get the product ready for the market and manufacturing at scale. In this case, it would make sense to consider filing for patent protection once the idea has been developed enough that you can describe how it works and how it will be used in the market. That clarity also increases the strategic value of your patent, as described above. In addition, while there is ongoing product development is common, consider filing for patent protection at key development milestones, such as completion of market studies, when a significant technical hurdle is overcome, and before substantial capital outlays are required, such as the development of production models or the purchase of capital equipment. Do not consider a single patent filing sufficient enough to protect the product adequately. Additional filings should be made as the product changes over time. This ensures that your patents align with the business's commercial plans. If there’s an urgent business need, it’s important to file a patent application quickly, even if the product is still in development. For instance, investors and partners want to see that you’re protecting the innovation that underpins your business. Filing a patent application before sharing the idea is critical and an appropriate step, as it creates a tangible asset that can help secure funding or favorable deals. This changes the conversation with investors completely, in our example, and focuses the discussion on the more important aspects of an investment, such as valuation and revenue. Sometimes, this requires filing before the concept is fully vetted and complete. That is okay, as you can file as a provisional application and then file follow-on patent applications that cover the key innovations you develop as the product matures into a business-ready revenue stream. If you have partners or employees that make premature publication of the invention, as discussed above, be sure to file a provisional application ahead of time, even if there is only enough information to cover the broad concept. Again, follow-on patent filings can be used to strengthen earlier filed but “sparse” provisional patent applications. Filing a patent at the right time is a strategic move that protects the investments you’ve already made in R&D, product development, and innovation. Getting the timing right is an vital aspect of implementing a robust patent strategy that secures patent rights for the business. Best practice is to file for patent protection, via a provisional application or regular patent application, before any public facing activities begin. Furthermore, executing a robust non-disclosure agreement (NDA) with anyone whom you plan to share information regarding the invention will give you added protection, while also minimizing the effect of such disclosure on foreign patent rights. For instance, you might consider an NDA with a potential investor before sharing information with them, or other situations with a potential supplier or contract manufacturer. Losing patent rights can be significant and can undermine your commercial objectives. More specifically, delaying patent protection can cost you: Priority rights, if a competitor files first. Ability to license or sell the technology. Legal protections in global markets. The opportunity to support valuation and fundraising efforts. In short, failing to file timely or filing late can remove a competitive advantage you once had, minimizes potential revenue streams, and lessens likelihood of meaningful investment.
June 27, 2025
Estates and Trusts
Corporate Trustees: Smart Choice or Risky Move?
Whether you name a financial institution to manage your trust assets when you are no longer able to do so for yourself, is ultimately a matter of personal preference and choice. In the first part of a two-part “point-counterpoint” consideration of corporate trustees serving as such for individuals’ personal trusts, I examine the potential advantages and reasons to do so. I’ll share the other side of the conversation—the potential drawbacks of naming a corporate trustee next month. What Is a Corporate Trustee? A corporate trustee is a bank, trust company, or professional fiduciary institution that manages trust assets for a fee. Such entities specialize in administering trusts and are regulated by state and federal laws to ensure ethical and competent asset management and protect against fraud and abuse. So, what are the advantages of utilizing a corporate trustee? Why should you name a financial institution to manage your trust? Is it the best choice in your situation? Consider the following top five advantages of a corporate trustee: Professional Expertise Most corporate trustees bring extensive knowledge in investment management, tax planning, fiduciary law, and trust administration. Managing others’ assets is what they do; it’s (typically at least) all they do. This can be especially valuable for complex trusts or large estates, where mistakes could be quite costly and have a substantial impact on the trust assets and both current and future, vested and/or contingent beneficiaries. Clearly, the level and extent of such expertise matters. When evaluating the potential advantages of a particular corporate trustee, consideration should be given to years of experience and the depth of knowledge of the team expected to manage one’s trust assets. Impartiality Face it, family dynamics can be, well, complicated. Appointing a family member or friend as trustee can sometimes lead to unintended and unforeseeable conflicts or strained relationships, especially when it comes to issues such as how to invest and whether and when to make distributions. For example, we only narrowly avoided litigation recently when one of several sibling beneficiaries determined herself to be on the wrong side of preferential treatment by their deceased parent’s hand-picked trustee, a long-time close family friend. For the trustee’s part, it was difficult not to play favorites when certain of the sibling beneficiaries considered and treated the trustee like family, while the lone sibling saw the trustee as nothing more than a favorites-playing impediment to her inheritance. In principle, at least, a corporate trustee affords objective decision-making, free from personal bias, or emotional involvement. Continuity and Reliability Unlike individuals who may become ill or infirm, die, or relocate, corporate trustees typically afford long-term stability and continuity. This can be particularly useful for trusts designed to last for decades or span multiple generations. Here too, however, one would be well-advised to recognize that not all trust companies are created equal. It is important to inquire about those trust company employees who will oversee and provide day-to-day management decisions regarding your trust and what, if any, checks and balances there might be if and when staffing changes occur. Fiduciary Duty Corporate trustees are legally bound to act in the best interests of the beneficiaries and are held to high fiduciary standards. Most also carry insurance and are subject to regulatory oversight, which adds extra layers of protection for beneficiaries who might not even be born at the time of making the trust. I note here, as well, that a generally conservative approach (erring on the side of caution – for the benefit of future/contingent beneficiaries) when it comes to investment/distribution decisions not only serves to provide an added layer of protection for the intended future beneficiaries but, thinking cynically, also happens to align with a corporate trustee’s own pecuniary self-interest, i.e. concomitantly serves to generate higher income for the institution. Administrative Efficiency Trust administration requires ongoing tasks, including record-keeping, periodic tax filing obligations, asset (re-)valuation responsibilities, timely periodic noticing, and asset distribution requirements (discretionary and mandatory). Corporate trustees generally maintain systems and staff to manage these responsibilities efficiently and accurately. At a minimum, one should evaluate a potential corporate trustee’s abilities and track record in this regard.* *As a pertinent aside here, I note that certain individual professionals offering “trustee services” (accountants, for instance) might afford a similar level of administrative efficiency, along with the types of fiduciary protections, professional expertise, and one or more of the additional benefits described above.
June 27, 2025
Estates and Trusts
Unintended Inheritance Happens More Than You Think: Ensuring Your Loved Ones Inherit as Intended
Roughly two-thirds of Americans are estimated to die without executing a valid will. As a result, assets in their name will pass under the laws of intestacy of their home state. The laws of intestacy are essentially default rules that typically transfer a decedent’s assets to their closest living relatives, such as a spouse, children, parents, or siblings. Intestacy laws would likely transfer the assets of many decedents to their intended beneficiaries. It would be uncommon for someone to wish to disinherit their spouse or one or more of their children. However, intestacy laws do not operate on “non-probate assets,” such as joint bank accounts with rights of survivorship, life insurance policies, or retirement accounts. As a result, it is likely that a portion of a decedent’s assets will not pass to their intended beneficiaries. Sometimes, this means that one beneficiary receives a larger share of a decedent’s assets than the others. Other times, virtually all of a decedent’s assets pass to someone they had no intention of ever receiving their assets, while their intended heirs are left without any recourse. Thankfully, some states have laws that will override a beneficiary designation of a non-probate asset if it is likely that the decedent, under the circumstances, would not have intended to provide for that person. One such common circumstance is when a decedent fails to update their beneficiary designations after divorce. For New Jersey residents, N.J.S.A. 3B:3-14 automatically revokes non-probate transfers of assets to a divorced individual, returning the assets to the decedent’s estate to be distributed pursuant to the terms of their will or the laws of intestacy. Similarly, for New York residents, EPTL 5-1.4 automatically revokes non-probate transfers of assets to a divorced individual. However, this automatic revocation will not apply in all cases and to all assets. For example, there is no automatic revocation where the assets are specifically disposed of under the terms of a “governing instrument.” A governing instrument includes a will, trust, deed, or securities, such as stocks and bonds. In the Matter of the Estate of Michael D. Jones, a case recently decided by the Supreme Court of New Jersey (the highest state court), the decedent married his ex-spouse in 1990 and named her as the pay-on-death beneficiary of his U.S. savings bonds. The decedent and his ex-spouse divorced in 2016. Their divorce settlement agreement (DSA) allocated certain assets to each individual and provided that all assets not specifically referred to in the DSA would be owned by the person whose name was on the title to the given asset. The DSA did not specifically mention the savings bonds. The ex-spouse also specifically waived her right to inherit from the decedent’s estate. The decedent passed away in 2019, intestate, without having updated the pay-on-death beneficiary of his U.S. savings bonds. His ex-spouse later redeemed the U.S. savings bonds. The decedent’s daughter was appointed the administrator of the decedent’s estate and promptly sought to recapture the proceeds from the U.S. savings bonds. The court ultimately concluded that the ex-spouse was entitled to the proceeds of the U.S. savings bonds, reasoning that the bonds were regulated by the IRS Federal Treasury regulations, the “governing instrument.” Specifically, these regulations provided that when the owner of a bond dies and is survived by the named beneficiary, the named beneficiary is recognized as the sole and absolute owner of the bond. There are a number of takeaways from this case. First, even if the facts of this case were different and the administrator of the decedent’s estate had won, it would have been a pyrrhic victory at best. The decedent’s beneficiaries would face delays in receiving their inheritance, and the estate would incur significant legal fees and costs in reclaiming these assets. Second, while this case only dealt with U.S. savings bonds, there are many types of assets that have “governing instruments” with specific provisions concerning the death of the account owner. For example, in LeBoeuf v. Entergy Corp., the plan participant of a 401(k), who was a widower at the time, named his children as his designated beneficiaries. He later remarried. When the plan participant died, his 401(k) account had a balance of approximately $3,000,000. His children discovered that the plan sponsor had paid the death benefits exclusively to his second wife. It was revealed that under the terms of the plan documents, a subsequent marriage automatically revoked the beneficiary designations in favor of the new spouse. One could argue that the benefit of this provision is that a plan participant would avoid inadvertently disinheriting their spouse. However, in LeBoeuf, it is almost certain that the death benefits were distributed contrary to the plan participant’s intentions. Lastly, it highlights the critical importance of regularly reviewing existing estate planning documents, the titling of assets, and designated beneficiaries, to ensure that they pass to your intended loved ones at the time of death.
June 23, 2025
Estates and Trusts
Married? Consider Upgrading the Deed to Your House
In 1604, Sir Edward Coke said, “Your house is your safest refuge.” Or words to that effect. He was writing in Latin, but the venerable English judge got his point across well enough. The expression has come down to us in the 21st century as “A man’s house is his castle.” The family home should be a safe haven where we can take refuge from the perils and dangers of the outside world. Within its walls, relationships are nurtured, friendships are enjoyed, and children are loved and encouraged. In addition to the locks and security lights that attempt to keep burglars at bay, a married couple’s home can be protected from certain types of creditors simply by how the property is titled. Owning a house as “tenants by the entirety” is reserved for married couples and can provide significant benefits to those who take advantage of it. First, this form of ownership will transfer the house to the survivor if either spouse should die. This transfer will be automatic and efficient, even if the deceased spouse dies without a will. Second, it will protect the house from creditors with a claim against either spouse individually. Titled this way, the family home is less likely to be in jeopardy if one spouse becomes the target of a lawsuit, defaults on a loan, or needs to declare bankruptcy. This can be especially important to individuals in a profession that carry a high risk of personal liability, such as doctors, lawyers, and contractors, as well as teachers, realtors, and therapists. In this way, it serves as a form of free insurance. Ownership of a home as tenants by the entirety is available in many states, including Maryland. And thanks to recent changes in state law, married couples in Maryland can enjoy these creditor protections even if they place their residence in one or more revocable living trusts. The protection against creditors does have its exceptions. One is liens placed on the property by the IRS. Another is creditors who have obtained a judgment against both spouses jointly. The right to title your home this way is one of the unsung benefits of marriage. It is the state’s way of protecting marriages by ensuring that one spouse’s creditor problems don’t put the other spouse and any children out on the street. And, of course, with same-sex marriage legal nationwide, it’s a benefit that applies to gay and straight couples alike. If you and your spouse owned a house before getting married, it’s probably titled as “joint tenants with right of survivorship.” This form of ownership also transfers the property to the survivor if one spouse should die, but it does not protect against creditor liens. Fortunately, you can upgrade your ownership of the house simply by having a new deed prepared. Contact an attorney who practices in this area to get started. The executed deed will need to be filed with the county Land Records office, and you might need to obtain a lien certificate and pay any taxes or other obligations before the deed can be recorded. There should be no transfer or recordation taxes to pay, but there is a nominal recordation fee. If you have a mortgage, a conversation with the provider is advisable beforehand. Once the deed is recorded, you can take comfort in knowing that your castle now has an extra measure of protection from the perils and dangers of the outside world.
June 23, 2025
Labor and Employment
SCOTUS Levels Title VII Standards in Reverse Discrimination Case
The U.S. Supreme Court unanimously ruled that so-called “reverse discrimination” claims—discrimination claims brought by members of a “majority” race, gender, or other protected characteristic—are not subject to heightened standards of proof. The June 5, 2025, decision in Ames v. Ohio Department of Youth Services clarifies the legal standards for such claims under Title VII of the Civil Rights Act of 1964, serving as a critical reminder for employers to ensure fairness in employment decisions as reverse-discrimination claims become more prevalent. Issue The core question before the court was whether majority-group plaintiffs must show additional “background circumstances” to support the claim that the employer discriminates against the majority, in addition to meeting the standard elements of an employment discrimination claim under Title VII. In discrimination law, a majority group refers to a group that is perceived as having numerical or social dominance in a specific context. For example, 78% of software engineers are men, making males the majority group in this case. The Ames ruling clarifies that members of majority groups—such as heterosexuals in Ames’s case—do not face a higher burden when alleging workplace discrimination, ensuring equal protection under Title VII for all individuals. Background Marlean Ames, a heterosexual woman, was employed by the Ohio Department of Youth Services since 2004. In 2019, under a new supervisor (a homosexual woman,) Ames received positive performance reviews but was passed over for a promotion to the Bureau Chief of Quality in favor of another homosexual woman. Four days later, Ames was demoted to a secretarial role, and a gay man was hired to fill her previous position. Ames filed a lawsuit against her employer, alleging discrimination based on her sex and sexual orientation under Title VII. The U.S. District Court for the District of Ohio granted summary judgment in favor of the Ohio Department of Youth Services, and the Sixth Circuit affirmed. The Sixth Circuit held that, as a heterosexual plaintiff, Ames was required to show “background circumstances” to support the suspicion that the employer was an unusual one that discriminated against the majority, including evidence that a member of the minority group made the employment decision or statistical evidence of a pattern of discrimination against the majority. Ames failed to meet this requirement, as her termination was decided by heterosexual directors, and she provided no evidence of a broader pattern of discrimination. Prior to the Supreme Court’s ruling, four circuit courts (Eighth, Seventh, D.C., and Tenth) had adopted the “background circumstances” requirement for majority-group plaintiffs, while two circuits (Third and Eleventh) had rejected it. Court’s Holding In a unanimous opinion authored by Justice Ketanji Brown Jackson, the Supreme Court held that majority-group plaintiffs bringing “reverse discrimination” claims under Title VII are not required to show “background circumstances” to prove discrimination. The court found that this requirement is inconsistent with the text of Title VII and Supreme Court precedent. The court emphasized that Title VII’s disparate-treatment provision does not distinguish between majority and minority-group plaintiffs, focusing instead on “individuals” rather than groups. The statute’s language, which establishes protections for every individual regardless of group membership, leaves no room for courts to impose special requirements on majority-group plaintiffs. The court further clarified that all Title VII discrimination claims should be evaluated under the burden-shifting framework established in McDonnell Douglas Corp. v. Green (1973,) without additional hurdles for majority-group plaintiffs. The “background circumstances” rule, the court noted, disregards the flexibility of the McDonnell Douglas framework, which was never intended to be “rigid, mechanized, or ritualistic” (Swierkiewicz v. Sorema N.A., 2002). By imposing a uniform, highly specific evidentiary standard on majority-group plaintiffs, the rule violated this principle. The court rejected the Ohio Department of Youth Services’ argument that the “background circumstances” requirement was merely a way to assess whether an employment decision suggested discrimination based on a protected characteristic. The Sixth Circuit’s application of the rule explicitly relied on Ames’s failure to meet a heightened evidentiary standard, which Title VII does not support. Consequently, the Supreme Court vacated the Sixth Circuit’s judgment and remanded the case for application of the proper prima facie standard. Concurrence Justice Clarence Thomas, joined by Justice Neil Gorsuch, concurred fully with the majority but wrote separately to highlight the problems with judicially created “atexual legal rules” like the “background circumstances” requirement. Justice Thomas pointed out the difficulty of defining the “majority” in contexts like gender (where women are a majority nationally but not in certain industries) or race (where categories are often imprecise). He also questioned the McDonnell Douglas framework’s utility, signaling openness to reconsidering it in future cases. Notably, Justice Thomas referenced diversity, equity, and inclusion (DEI) initiatives in a footnote, suggesting that such programs may lead to discrimination against perceived majority groups, a point likely to be cited in future challenges to DEI policies. Why This Matters This ruling ensures that all workers, regardless of their race, gender, or other protected characteristic, are subject to the same legal standards when bringing discrimination claims under Title VII. By eliminating the “background circumstances” requirement, the court has removed an unfair hurdle for majority-group plaintiffs, likely leading to an increase in reverse-discrimination claims. The decision aligns with recent Supreme Court rulings emphasizing equal treatment, such as those on affirmative action and job transfers. Takeaways for Employers Increased Scrutiny of Employment Decisions: With barriers lowered for majority-group plaintiffs, employers should expect a rise in reverse-discrimination claims. All employment decisions—hiring, promotions, terminations—must be supported by legitimate, well-documented business reasons, regardless of the employee’s protected class. Training and Compliance: Employers should train supervisors and HR personnel to recognize and prevent all forms of workplace discrimination, including those affecting majority groups. Litigation Strategy: While employers can still use evidence like the decision-makers’ characteristics or the experiences of other employees to rebut discrimination claims, the Supreme Court has confirmed that reverse-discrimination claims face no higher burden of proof than other Title VII claims. DEI Considerations: The decision, particularly Justice Thomas’s concurrence, signals potential judicial skepticism toward DEI initiatives. Employers should review DEI programs to ensure compliance with Title VII and prepare for possible legal challenges. This ruling underscores the importance of equitable treatment across all employee groups and reinforces the Supreme Court’s commitment to uniform application of Title VII’s protections.
June 19, 2025
Business
AI Reps & Warranties: Emerging Issues in Deals and Commercial Contracts
Artificial intelligence quickly became embedded into business operations, software platforms, internal workflows, and consumer-facing applications. This means the legal risks associated with its development and growth are moving from the abstract to the real world. AI is not only changing how businesses operate, but also how leaders and legal practitioners must structure and negotiate contracts. Legal teams, in-house counsel, and M&A deal professionals can no longer consider this a niche issue and should consider it a negotiated deal point involving risk allocation, liability exposure, and asset valuation. While there is significant attention paid to the disruptive operational power of AI, its implications on representations and warranties in commercial agreements and corporate transactions deserve just as much attention within the legal community. Some tailored legal frameworks are already emerging to address the novel concerns around data privacy, intellectual property, indemnity, and operational continuity. These issues are especially critical in the context of software acquisitions, SaaS contracts, and any M&A deal involving AI-derived intellectual property or business processes. AI-Specific Representations in Deals The National Venture Capital Association (NVCA) model forms were updated at the end of 2024 to incorporate AI-specific representations and warranties. These terms are increasingly reflected in market practice: Targets must affirm that AI tools were used in compliance with applicable licenses, regulations, and data use agreements. Targets must represent that they did not input any personal, confidential, or protected information into AI tools, unless those tools guarantee that such data is not used for training or product enhancement. Targets must represent that data was deidentified or anonymized prior to use in training models to avoid running afoul of applicable data protection standards. Targets must disclose any generative AI platforms used to develop proprietary IP and warrant that such use does not jeopardize any ownership rights being acquired. The above issues are only the tip of the iceberg. Transactions and agreements involving complex AI products must include increasingly technical reps concerning: Model training logs and documentation Fine-tuning methods and retention of model weights Mechanisms used in retrieval-augmented generation (RAG) Use of synthetic or auto-generated content in commercial workflows Model validation performance thresholds, including floating point operation limits and accuracy ranges As the technology matures, the legal community is catching up by embedding operational guardrails directly into transactional documentation. Practical Contractual Risk Areas in AI Licensing Commercial licensing agreements involving AI must now be viewed through a much more detailed legal lens. Counsel should be prepared to negotiate contract terms specifically addressing: Non-infringement guarantees concerning both source code and training data, especially where data scraping or aggregation may have occurred Explicit ownership claims over AI outputs, derivatives, and model weights Training data auditability, including the legal basis for data collection, classification, and labeling Compliance with global privacy and cybersecurity laws, including GDPR, CPRA, and HIPAA when applicable Robust indemnification obligations for breaches of data usage restrictions, IP violations, or algorithmic harms Tech E&O and cyber liability insurance provisions, ensuring recourse exists if generative tools malfunction, hallucinate, or produce defamatory content In many cases, the liability profile of AI is uncertain and difficult to quantify. Because many models operate as "black boxes," licensees are often left without a clear explanation of how certain outputs were generated or what datasets were used in training. This makes traditional warranties about performance or fitness for a particular purpose difficult to enforce. As a result, buyers and licensees are demanding broader representations, heightened disclosure obligations, and post-closing audit rights to mitigate these unknowns (while sellers are seeking to disclaim warranties and narrow representations). M&A and AI Due Diligence AI risk has quickly become a key diligence category in M&A deals, especially in transactions involving software, e-commerce, analytics, or consumer engagement platforms. Buyers are now expected to conduct diligence not just on IP rights and customer contracts, but also on how AI has been implemented and governed. Pre-Acquisition Diligence Key diligence areas include: Training data sourcing: Was the data obtained lawfully and under enforceable terms? Privacy risk: Was any personally identifiable information (PII) used in training or prompting without consent? Third-party code and APIs: Does the AI product depend on third-party components that might limit assignability or trigger license fees? Model update and retraining rights: Who controls the model lifecycle, including patches and performance tuning? Export control risks: Could the AI model be subject to ITAR, EAR, or other national security controls due to its capabilities? Post-Closing Continuity Buyers should also require: Complete AI architecture diagrams and component inventories Documentation of ethical safeguards and bias mitigation processes Retention policies around input prompts and AI-generated output logs Model deployment playbooks and downtime risk disclosures Transition services agreements, software escrow, and founder retention may also be needed to ensure business continuity and proper knowledge transfer where AI is a critical but complex asset. IP, Privacy, and Employment Triggers This isn't only an issue for "tech transactions." As AI expands across business functions, its legal implications multiply. Core issues include: Intellectual property ownership, particularly whether AI-generated outputs are protectable under U.S. copyright law or must be secured as trade secrets Privacy and cybersecurity risks stemming from unstructured data ingestion and prompt leakage, especially when sensitive information is processed or used Employment law exposure, including discriminatory hiring algorithms or opaque automated decision-making processes that may violate EEOC or state-level labor rules Recent case law and regulatory action suggest that companies using AI for decision-making will be held to explainability and fairness standards, even if they do not fully control or understand the model. Additionally, companies leveraging AI in consumer products or safety-critical environments must consider product liability exposure under traditional tort theories, especially if AI contributes to physical or economic harm. Think about the auto-driving taxi that must decide whether to hit the pedestrian or crash the car. AI and IP Security Agreements As more companies develop proprietary AI tools, models, and datasets, lenders and investors are increasingly taking security interests in these intangible assets. This requires a rethinking of traditional IP Security Agreements. When collateral includes AI-generated or AI-driven intellectual property, legal teams should evaluate: Whether model weights, training datasets, or prompt libraries are clearly documented and listed as pledged assets Whether the borrower can demonstrate ownership and provenance of the training data and model code If the model is fine-tuned from a third-party foundation model, whether the underlying license permits encumbrance or assignment If retrieval-augmented generation (RAG) is used, whether the underlying corpuses and connectors are part of the security package The existence of source code escrow to ensure access in the event of default or bankruptcy Any restrictions in open source or SaaS agreements that may limit foreclosure or reassignment rights Moreover, the lender’s enforcement rights may be limited if the AI model or data is co-owned, cloud-hosted, or reliant on third-party APIs. Security interests must be carefully drafted to reflect operational dependencies, and perfection of those interests may require filings beyond the USPTO, including notice to cloud vendors or consent from licensors. IP Security Agreements for AI assets must go beyond standard boilerplate and should be tailored to the unique hybrid nature of AI systems combining software, services, and data streams. In many cases, a supplemental AI-specific collateral schedule may be appropriate. Takeaways for Legal and Deal Teams AI is no longer a novel technology element to be glossed over in standard reps and warranties. It is a high-stakes business driver that intersects with every major legal category: IP, privacy, cybersecurity, employment, antitrust, and contract liability. Actionable takeaways include: Draft AI-specific reps and warranties that cover data sourcing, training protocols, model rights, and use case restrictions Build diligence frameworks that include discussions with technical teams and review of logs, policies, and product roadmaps Negotiate indemnification mechanisms that allocate financial risk from misuse, error, or regulatory exposure Ensure insurance provisions cover AI incidents, from hallucinated content to data leakage Establish post-closing governance and monitoring structures, particularly in acquisitions involving live AI models or mission-critical algorithms Review and update IP Security Agreements to specifically address AI collateral and embedded third-party dependencies Ultimately, the central legal question becomes: When AI makes a mistake, who pays? Whether drafting a commercial SaaS agreement or executing a strategic acquisition, every deal team must be ready to answer that. As legal and technological standards continue to evolve, ongoing adaptation will be essential.
June 19, 2025
Franchise Law
SBA Franchise Directory Reinstated: Key 2025 Updates for Franchisors and Franchisees
The U.S. Small Business Administration reinstated the Small Business Administration (SBA) Franchise Directory on June 1, 2025, reversing the 2023 decision to sunset the program. The Directory has long been the primary reference that SBA-certified lenders consult to determine if a franchisee of a brand is eligible for SBA-guaranteed financing. SBA guaranteed loans are intended to finance independently owned small businesses. For a franchisee to qualify as the owner of such a business, the franchisor must not unduly control the day-to-day operations, such that the person applying as a franchisee is really a passive investor. Under the updated framework, franchised brands will no longer need to sign the SBA Franchise Addendum (Form 2462), or an addendum specific to franchisees receiving SBA-guaranteed loans that the franchisor had negotiated with SBA. Instead, each brand must execute and submit to the SBA a new Certification that expressly affirms compliance with the eligibility conditions for Directory listing. See SBA Franchise Directory. By issuing the Certification, the franchisor will have agreed not to enforce any provision in its contracts with an SBA-financed franchisee that is inconsistent with the certification. Any brand that is not yet listed in the Directory may submit its current FDD and signed Certification at any time for review by the SBA. Brands already in the Directory may maintain their status by filing certifications along with their current FDDs on or before July 31, 2025. Until then, lenders may continue to close loans using the familiar SBA addendum, but SBA records will flag each brand as “Certification Pending.” On August 1, 2025, any brand that has not submitted a certification will be removed from the Directory, and its franchisees will become ineligible for SBA-backed financing until the brand is re-listed. There is no fee for a directory listing and certifications may be submitted to the SBA at no cost. One aspect of the certification that is particularly worth highlighting: “[The] Franchise Agreement does not prevent the Franchisee from having meaningful oversight over the operations of the business. Meaningful oversight includes the authority to: (i.) Approve the annual budget; (ii.) Have control over the bank accounts; AND (iii.) Have oversight over the employees operating the business (who must be employees of the Franchisee). A Franchise Agreement does not prevent a Franchisee from having meaningful oversight over the operations of its business by requiring the Franchisee to comply with quality, marketing, and operations standards that govern the Franchisee’s use of the Franchisor’s system of operations.” Therefore, companies that market as “franchises” which are primarily passive investment opportunities, are likely to face more scrutiny from SBA regulators concerned that the borrower actually operates the small business seeking funding. Such companies may need to consider making changes to their business model if SBA guaranteed loans are important to their growth strategy. For franchisees, if you are likely to seek an SBA guaranteed loan to finance your business, or you expect that a purchaser of your franchise might use such a loan to buy you out, then you should make sure that the franchisor has registered with the Directory. If it has not, you may want to ask, “Why not?”
June 18, 2025
Business
Pennsylvania Limits Non-Compete Agreements for Health Care Practitioners
In July 2024, Pennsylvania Governor Josh Shapiro signed House Bill (HB) 1633, the Fair Contracting for Health Care Practitioners Act (the "Act"), into law. In summary, the Act: (1) limits the enforceability of non-competes against certain health care practitioners; and (2) imposes a notice obligation on employers of those practitioners. The Act became effective on January 1, 2025. The purpose of this article is to revisit this important legislative development in its first year of existence, given its potential to significantly impact the health care landscape. Here is a breakdown of the Act changes, including who it covers, its application in case law, and its potential impact on physician and other clinical professional employment contracts across the Commonwealth. Limits on Non-Competes The Act renders unenforceable non-compete covenants with a duration longer than one year for certain health care practitioners, subject to the following caveats: The Act only applies to “health care practitioners,” which the Act defines to include “medical doctors,” “doctors of osteopathy,” “certified registered nurse anesthetists,” “certified registered nurse practitioners,” and “physician assistants,” as those terms are defined in other Pennsylvania statutes. The Act only applies to “non-compete covenants,” defined as agreements between an employer and a health care practitioner that “has the effect of impeding the ability of the health care practitioner to continue treating patients or accepting patients.” Notably, the Act does not apply to other post-employment restrictive covenants, such as confidentiality provisions and employee non-solicitation clauses. The Act does not prohibit employers from enforcing non-competes with a duration of one year or less, provided that the employer did not terminate the health care practitioner’s employment without cause. This means that employers cannot enforce a non-compete against health care practitioners who are terminated without cause, regardless of the duration of the covenant. The Act is silent as to whether Pennsylvania courts may reform overbroad non-competes. Presumably, that decision is still within the discretion of the court. The Act does not apply to non-competes entered into in connection with the sale of a business or grant of equity, provided the health care practitioner was a party to the transaction. The Act becomes effective on January 1, 2025. Importantly, it does not apply retroactively. That means that non-compete agreements entered into with health care practitioners prior to the effective date will remain enforceable, subject to existing requirements under Pennsylvania law. Notification Requirement The Act also imposes a patient notice requirement on employers of health care practitioners. Within 90 days of a health care practitioner’s termination of employment, employers must notify the separated practitioner’s patients: (1) of the practitioner’s departure; (2) if the patient chooses to receive care from the departed health care practitioner or another health care practitioner, how the patient may transfer their health records to that provider; and (3) that the patient may be reassigned to another practitioner in the employ of the employer if the patient wants to continue treatment with the employer. Importantly, this notification obligation applies regardless of whether the separated practitioner is subject to a non-compete. In addition, an employer is required to provide these notifications within 90 days of the health care practitioner’s departure. However, the notification requirement applies only where the health care practitioner had an ongoing outpatient relationship with the patient for two or more years. Existing Case Law & Precedents Pre-Act Foundation: WellSpan Health v. Bayliss (2005) Under Pennsylvania common law, courts evaluating physician non-competes traditionally balance public interest—particularly patient access to care. In WellSpan Health v. Bayliss, the Commonwealth Court emphasized that ensuring patients can continue treatment is paramount when deciding whether to enforce restrictive covenants law. While predating the Act, this ruling sets the tone: Pennsylvania courts lean toward protecting continuity of care when non-competes might limit it. Post-Act Litigation: Thakkar v. AHN (2025) Shortly after the Act took effect, gastroenterologist Dr. Thakkar challenged Allegheny Health Network (AHN) in the Allegheny County Court of Common Pleas. After AHN declined to renew his contract, Dr. Thakkar stated that the existing non-compete prevented him from practicing in the same region, which disrupted patient care. Although the trial court sided with AHN, Thakkar has appealed to the Pennsylvania Superior Court. His argument underscores the Act’s protections: non-competes imposed post‑January 1, 2025, should be void if the practitioner is dismissed. Open Issues Under the Act The Act does not define many terms and is such a hodgepodge of concepts and requirements that it could be a health care employer's nightmare. Some unanswered questions include: Are reasonable non-compete covenants enforceable where the health care practitioner receives a tiny “ownership interest”? Are non-compete covenants effective for more than one year enforceable where an employment agreement is not renewed? Will a patient non-solicitation provision be included within the scope of the Act? Is the patient notice requirement triggered regardless of the reason for the end of the employment relationship? Does the death or retirement of a health care practitioner trigger a potential notice requirement? Is the patient notice requirement necessary where the health care practitioner is employed for only 23 months (i.e. two years)? How is patient notice accomplished? Is a website posting sufficient? Is there any penalty for noncompliance? The Act reflects a trend in states across the U.S. focused on promoting physician mobility and improving patient access to care, while raising important compliance considerations for hospitals, health systems, medical practices, and their legal teams. For physicians and other clinical professional employers, the Act presents both compliance challenges and the need for directional shifts. Employment contracts will need to be revised, and retention strategies will need to pivot from focusing on legal restrictions to emphasizing purposeful engagement, such as competitive compensation, workplace culture, or career growth opportunities.
June 18, 2025
Estates and Trusts
New York Advances Medical Aid in Dying Act Amid Ongoing Right-to-Die Debate
The New York State Senate passed the Medical Aid in Dying Act this week, taking a significant step forward towards legalizing physician and medically assisted death for terminally ill patients in New York. The Bill, which had previously been approved by the state assembly after an emotionally charged five-hour session, awaits Governor Kathy Hochul's action. If the Governor signs it into law, New York will become the 11th U.S. state, along with the District of Columbia, to codify an individual’s right to die with assistance from the medical community. What is the Medical Aid in Dying Act (MAID)? The latest incarnation of the signed legislation allows mentally competent, terminally ill adults with a prognosis of six months or less to be prescribed life-ending medication. In order to qualify, there are stringent requirements. First, the patient must request assistance in writing and verbally to their physician; a measure that might be a stumbling block for those whose affliction, disease, or condition may prevent one or the other. Once the request is made in writing and verbally, two doctors then must confirm the patient’s terminal diagnosis, prognosis of six months or less, and the patient’s capacity as it relates to being of sound mind. A terminal diagnosis and prognosis are more calculable standards than capacity, which, in New York State has always been a fiercely contested subject and, in some cases, subjective and specific to the matter at hand. The additional requirement mandates that there be two witnesses to the request to prevent any coercion. Certain individuals are explicitly prohibited from serving as witnesses: relatives by blood, marriage (even domestic partners,) adoption, any beneficiary entitled to a portion of the patient's estate, individuals affiliated with the healthcare facility where the patient is receiving treatment, as well as the patient’s care providers such as the attending physician and the consulting physician. The patient’s nominated health care proxy and agent under the Power of Attorney are also prohibited from serving as a witness. Many advocacy groups have been pushing for this legislation for the better part of a decade and argue that it finally offers terminally ill patients a compassionate option to end their life and, presumably, their suffering. However, there are groups on the other side that have been vocal in their opposition, including certain religious and disability rights organizations, which have expressed concerns that such a law could disproportionately impact the disabled community. Compassion & Choices, one such advocacy group in favor of the legislation, has repeatedly pointed out that a staggering 72% of New Yorkers support medical aid in dying and have urged lawmakers to advance the legislation that has long languished in committee in Albany. While it is unclear what Governor Hochul will do, the fact that the state assembly and senate have reached a consensus marks a significant milestone for those who advocate for such relief. The legislation hangs in the balance until Governor Hochul's decision is made but this author suspects that regardless of her decision, the controversy will continue about end-of-life care, patient autonomy, and the role government may or may not have in a person’s life and death.
June 17, 2025
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