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
Healthcare
Can I Open a Clinic Without Being a Doctor?
Many assume only licensed physicians can own and operate a healthcare clinic. While this may hold true in some cases, particularly when medical diagnosis and treatment are involved, there are corporate structures and legal strategies that allow non-physicians to own or co-own a clinic, if they do it the right way. This is where compliance with corporate practice of medicine (CPOM) laws, HIPAA rules, and state-specific healthcare regulations becomes important. You must not be a doctor to open a clinic. However, there’s a complex legal framework involved, and failing to follow the rules can lead to serious consequences like fines, license revocation, or even criminal charges. This blog will help you know the types of clinics you can open without a medical license. It will also break down the steps involved in opening a clinic without being a doctor in California. Who Can Open a Clinic in California? Under California law, not just anyone can open a medical clinic. Only certain individuals and entities are legally allowed to own or operate a clinic, especially when the services offered involve direct medical care or clinical decisions. Licensed medical professionals such as MDs, DOs, chiropractors, and dentists are authorized to own and operate a medical practice, as they have the required medical training and are regulated by professional boards. However, non-physicians can also participate in the healthcare industry by owning or investing in clinics as long as they do not violate California’s corporate practice of medicine. This typically means they must avoid directly providing or supervising medical services and instead focus on the business aspects of running a clinic, such as management services, human resources, billing services, and marketing. Business people and corporate entities can legally operate clinics through compliant legal structures that respect the division between clinical expertise and business operations. These include models like Management Services Organizations (MSOs), where non-doctors manage administrative functions but leave all clinical operations and medical decisions to licensed healthcare providers. To legally open a clinic in California, it’s not just a matter of setting up an office and hiring staff. It requires full compliance with state laws, especially California Business & Professions Code §2400, which governs the corporate practice of medicine. The law is designed to ensure that only licensed professionals make decisions about patient care, safeguarding the integrity of medical services. This separation of roles is fundamental to maintaining quality healthcare and legal compliance across the state. What Happens if You Break California Healthcare Laws? Failing to comply with California’s healthcare laws can have devastating consequences, as the state takes violations of the corporate practice of medicine very seriously. If you open or operate a clinic illegally, especially without being a licensed medical professional or without ensuring compliance, you could face steep fines and civil penalties from state regulators like the Medical Board of California. These fines may reach thousands or even hundreds of thousands of dollars, depending on the severity of the offense. Beyond financial penalties, the state may shut down your clinic entirely or revoke any associated licenses, even if the only issue is with the clinic’s ownership structure, which alone can render the entire operation unlawful. In some cases, individuals may face criminal charges for the unauthorized practice of medicine, which can be charged as a misdemeanor or felony under Business & Professions Code §2052. The financial risks are also immense. If your clinic is shut down, you could lose all your investment, such as your leased office space, your staff, your equipment, your branding, and everything you’ve built. Physicians who lend their names to non-compliant clinics risk disciplinary action from their licensing board, which could result in license suspension or permanent revocation. Insurance companies may also refuse to cover malpractice claims or defend you in court if your clinic was not legally structured. This could leave you open to civil lawsuits from patients or employees who claim harm due to improper oversight or an illegal operation. A violation can also lead to a permanent ban from owning or investing in another healthcare business and could trigger serious investigations from state and federal agencies, including the Department of Justice, the Department of Consumer Affairs, or even the FBI, especially if fraud is suspected. Can a Non-Physician Own a Medical Practice in California? No, a non-physician cannot legally own a medical practice in California if that ownership involves exercising control over clinical decisions or providing medical services. Under California’s Business & Professions Code §2400, the state enforces a strict ban on the corporate practice of medicine. Therefore, only licensed medical professionals such as medical doctors (MDs), doctors of osteopathy (DOs), and other regulated healthcare providers can legally own medical practices and directly provide medical services. This law protects the quality of patient care by ensuring that clinical expertise and medical decisions remain under the control of those with proper medical training and licenses. However, non-physicians are not entirely excluded from the healthcare industry. With the right legal structure, such as a Management Services Organization (MSO), a non-doctor can participate in the business aspects of a clinic without violating the law. In this arrangement, the non-physician may own and operate a management entity that provides billing services, human resources, medical equipment procurement, and general administrative support to a physician-owned Professional Medical Corporation (PMC). The key is to ensure that the non-physician has no control over patient care, clinical operations, or any medical decisions. What Types of Clinics Can You Open Without a Medical License? If you’re not a licensed doctor but want to enter the healthcare industry, there are still several types of clinics and health-focused businesses you can legally open, especially those that do not involve the practice of medicine. For example, non-physicians can fully own and operate non-medical clinics, such as wellness centers offering services like yoga, massage therapy, nutrition coaching, and fitness programs. These services do not require a medical license and fall outside the purview of the corporate practice of medicine laws. Similarly, mental health services provided by licensed therapists such as psychologists or licensed clinical social workers can be offered through a legally compliant structure, provided the clinical side is managed by the appropriate licensed providers. Non-doctors can also run cosmetic clinics staffed with licensed estheticians, although the services offered must be within a limited, non-medical scope. For more medically inclined ventures, non-doctors can open clinics that provide medical services, but only if they follow legal guidelines that maintain clinical oversight. Examples include Botox and filler clinics, which must have a supervising medical doctor or nurse practitioner, and urgent care or family medicine clinics, which must be structured through an MSO model and properly staffed with licensed medical professionals. In all cases, the non-physician must not interfere with the clinical side of the practice or attempt to provide medical services without proper licensure. What You Can and Can’t Offer Without a License If you’re not a licensed healthcare provider, you’re still allowed to offer a wide range of services related to the business and operational support of a clinic. You can manage booking systems, office staff, marketing, financial management, and other in-house services that support the delivery of healthcare services. You can own the building, manage the brand, and even collect fair market management fees from your partnership with a licensed provider. However, you cannot engage in any aspect of practicing medicine. This includes offering diagnoses, treatment plans, prescribing medications, or performing any form of surgical or invasive procedures. Even suggesting certain treatments or implying medical expertise without the proper license can be seen as violating state laws. These restrictions are enforced by the Medical Board of California and apply equally to all healthcare providers, whether you run a med spa, new clinic, or are simply a business person trying to get involved in the healthcare space. In addition to California’s laws, federal regulations, including those from the FDA and the Health Insurance Portability and Accountability Act (HIPAA), also apply. If your clinic handles protected health information, you must comply with privacy and security regulations under the Health Insurance Portability and Accountability Act (HIPAA), even if you’re not directly involved in patient care. What Do You Need to Open a Clinic in California? Starting a new clinic in California involves more than just leasing a space and hiring staff. You must carefully follow state laws and set up the right legal structure to avoid violating California’s corporate practice of medicine rules. Your goal should be to build a successful medical practice that delivers quality healthcare while ensuring full compliance with regulatory standards. The steps outlined below are essential for both medical professionals and business people aiming to operate healthcare services legally in California. Entity Formation To open a clinic legally in California, the first step is to choose the correct legal structure. If you’re a licensed medical professional, you can form a Professional Medical Corporation (PMC) to directly own your medical practice and provide medical services. If you’re a non-physician, you cannot practice medicine or interfere in clinical decisions, but you can operate through a Management Services Organization (MSO). The MSO model allows you to manage the business aspects of the clinic, such as billing services, human resources, financial management, and medical equipment procurement, while a licensed provider retains full control over the clinical side of the operation. Depending on your structure and goals, you may register your business as an LLC, S corp, or traditional corporation, but the setup must be done in compliance with California’s healthcare law. Licenses & Permits Every clinic in California must obtain the proper licenses and permits to operate. At a minimum, you’ll need a California business license and may need to file a Fictitious Business Name if the clinic operates under a name different from the legal entity. If you’re a medical doctor or another licensed provider, you may also need approvals or registration through the Medical Board of California. Beyond licensing, your physical location must pass zoning, fire, and building inspections to ensure it meets all health and safety requirements. These steps are essential whether you’re opening a med spa, urgent care, or federally qualified health center serving Medicaid patients. Staff & Supervision Whether your clinic offers mental health, medical care, or wellness services, it is important to hire only licensed medical professionals for roles that require clinical expertise. For non-physicians who want to operate medical practices, it is required by law to designate a medical director to oversee all patient care and clinical operations. This ensures that all medical decisions are made by properly credentialed individuals and not influenced by the business aspects of the clinic. All licenses and credentials should be verified with the relevant state boards to maintain compliance and uphold patient safety. Insurance Requirements To protect your clinic and meet healthcare compliance standards, securing appropriate insurance coverage is essential. Every clinic should have general liability insurance, and those offering medical services must carry malpractice insurance to cover potential patient claims. If you employ staff, workers’ compensation insurance is also required by California law. Clinics that manage digital health records must ensure that their cybersecurity insurance is HIPAA-compliant, in line with the Health Insurance Portability and Accountability Act (HIPAA). Following these insurance requirements not only protects your medical providers, staff, and patients, but also helps in ensuring compliance with state and federal laws. How to Open a Clinic Without Being a Doctor in California Opening a clinic as a non-doctor in California is possible, but only if you follow the same rules that apply to all legally compliant medical practices. Due to California’s strict corporate practice of medicine doctrine, non-physicians must take special care to avoid practicing medicine unlawfully. Below is a step-by-step guide to help business people and entrepreneurs enter the healthcare industry safely and successfully: Define Your Clinic Type and Services: Decide whether your clinic will offer medical services (such as Botox, family medicine, or urgent care) or non-medical services like nutrition coaching, massage therapy, or yoga. This decision determines your clinic’s legal structure, licensing, and supervision requirements. Offering healthcare services without a license can lead to serious penalties, so it’s not just a matter of choosing what’s popular. But your scope must align with what licensed medical professionals are legally allowed to provide. Structure the Business Legally: As a non-physician, you cannot own a medical practice directly. Instead, form a Management Services Organization (MSO) to handle the business aspects of the clinic, such as billing services, human resources, and financial management. Partner with a licensed Professional Medical Corporation (PMC) that provides the clinical expertise. Working with a healthcare law firm is essential to avoid violating California state laws and the corporate practice of medicine ban. Hire Licensed Medical Professionals: To provide medical services, your clinic must employ or contract with licensed healthcare providers, including physicians, nurse practitioners, and other medical staff. You’ll also need a medical director to oversee all clinical operations, ensuring that medical decisions are made by those with proper medical training and licensing. Verifying credentials through the Medical Board or relevant state authority is mandatory for ensuring compliance and protecting your patients. Secure Premises and Licenses: Choose a physical location that meets zoning requirements and complies with building and fire safety regulations. You’ll also need to obtain a California business license, any required clinic permits, and a Fictitious Business Name filing if applicable. All in-house services must be conducted in a properly approved space to avoid interruptions from city or state inspections. Ensure Compliance Systems Are in Place: Implement systems that meet HIPAA and Health Insurance Portability and Accountability Act requirements, especially if you’re handling protected health information. Furthermore, draft legally sound contracts, including the MSO service agreement, and ensure your legal structure clearly separates the clinical side from the business side. It’s also wise to prepare for possible audits from regulators or insurance companies. This is where ensuring compliance becomes critical to maintaining a successful medical practice. Launch With Legally-Compliant Marketing: When promoting your new clinic, stay cautious with advertising. Avoid making medical claims or promoting medical care services unless reviewed and approved by your medical director or attorney. All messaging should be aligned with what your licensed professionals are authorized to provide. Misleading promotions can result in investigations, civil penalties, or complaints to the Medical Board. Need Compliance Help Before Opening a Clinic? Non-doctors can open clinics in California, but only if they follow strict legal and regulatory guidelines. The key is setting up the right legal structure, such as a Management Services Organization (MSO), and ensuring that all clinical operations remain under the control of licensed medical professionals. Without this, you risk violating California’s corporate practice of medicine laws, and it could lead to serious legal, financial, and reputational consequences. You need experienced legal support to navigate complex healthcare laws, draft solid contracts, and ensure your business model doesn’t cross into unauthorized medical practice. Partnering with the right medical professionals and legal advisors ensures your clinic operates both legally and ethically from day one. FAQ Section Can I Hire Doctors and Nurses if I’m Not a Doctor? Yes, you can hire licensed doctors and nurses through a legally structured Management Services Organization (MSO), but they must retain full control over clinical decisions and patient care. Can a Non-Physician Own a Medical Practice? In California, non-physicians cannot directly own a medical practice that delivers medical care, but they can operate the non-clinical side through an MSO while partnering with a licensed provider. Can a Medical Practice Be an LLC? A medical practice itself cannot be an LLC in California unless it is a Professional Medical Corporation. However, an MSO providing non-clinical support services can be structured as an LLC. What Qualifications Do I Need to Open a Clinic? You don’t need a medical degree to open a clinic. But you must have the proper business licenses, entity formation, and legal oversight from licensed medical professionals if you offer medical services. Can I Open a Botox or Medspa Clinic Without a Medical Degree? Yes, but only if you partner with a licensed medical director who supervises all treatments and ensures compliance with California healthcare law and scope-of-practice rules. How Do I Protect Myself Legally as a Non-Doctor Owner? Use a compliant MSO structure, separate business and clinical operations, have clear service agreements, and work closely with a healthcare attorney to avoid violating the corporate practice of medicine ban.
June 26, 2025
Healthcare
MSO Rules for Med Spas
Med spas are booming across the U.S., blending aesthetic beauty treatments with medical-grade services like Botox, fillers, and laser therapy. With demand soaring, many entrepreneurs and non-physicians are eager to enter the market. However, state laws often prohibit non-doctors from owning or directly operating medical practices. That’s where Management Services Organizations (MSOs) come in. An MSO is a separate business entity that handles non-clinical operations such as staffing, marketing, billing, and office management, while the medical side must remain fully under the control of a licensed healthcare professional. This post explains what an MSO is and how it operates. It also highlights the core rules MSOs must follow, and points you to trusted legal experts who can help you set up or scale your med spa the right way. What Is an MSO in Healthcare? A Management Services Organization, or MSO, is a separate business entity that provides non-clinical management services to healthcare practices. The MSO does not participate in medical procedures or clinical practice, nor does it make medical decisions. Instead, it operates on the business side of a healthcare venture, enabling licensed physicians, nurse practitioners, and physician assistants to focus on patient care. In both general healthcare and aesthetic medicine, MSOs serve a critical function by allowing medical professionals to delegate administrative and operational duties. For medical spa practices, in particular, this separation is essential due to strict state laws that regulate who may own or operate a medical practice. MSOs help align with these healthcare laws by separating medical services from business management, ensuring that healthcare providers remain compliant while benefiting from improved operational efficiency. Why Med Spas Use MSOs The rise of medical aesthetics and the popularity of medical spas have led to increased interest from entrepreneurs, investors, and professionals without a medical background. However, in many states, corporate practice of medicine laws prohibit non-physicians from owning or controlling a medical practice. This legal restriction exists to prevent unfair business practices and to ensure that only qualified healthcare providers make decisions related to patient care, informed consent practices, and medical treatments. To navigate these legal barriers, med spas often adopt the MSO model. In this setup, the clinical side of the med spa must be owned and controlled by a licensed physician or medical doctor, while the MSO, usually owned by a non-physician, handles all non-medical management services. This includes everything from branding, marketing, support services, and financial management to handling malpractice insurance, medical equipment, and laws governing marketing and medical devices. This arrangement provides regulatory compliance and gives non-physician stakeholders a legal pathway to operate medical spas. For many, the MSO structure offers increased branding/licensing flexibility, better control of financial health, and the ability to build a profitable healthcare business without violating corporate practice restrictions. What Is the Difference Between an MSA and an MSO? An MSO is the legal entity that offers non-clinical services, while an MSA, or Management Services Agreement, is the legal contract that defines the relationship between the MSO and the professional entity or medical practice. The MSA outlines which management services the MSO will provide, the scope of its business operations, and how the management fees will be structured. It is crucial that this agreement respects fair market value principles to avoid issues with fee-splitting or violations of state laws. For example, MSOs cannot be paid a percentage of revenue from medical services in jurisdictions that strictly enforce the corporate practice of medicine. Instead, payments must reflect fair market compensation for the specific services rendered, whether that’s handling financial management, providing office space, or overseeing administrative functions like patient referrals or good-faith exams. The MSA is what legally binds the healthcare providers and the MSO together, clearly separating the medical interests of the licensed professionals from the business interests of the MSO. This clear division supports regulatory compliance, protects against liability, and ensures that medical board expectations are met. What Activities Can the MSO Perform for My Medical Spa? A Management Services Organization (MSO) plays a vital role in supporting the business operations of a medical spa, especially in states that enforce corporate practice of medicine (CPOM) laws. While the medical practice remains under the control of licensed physicians, the MSO is responsible for a wide range of non-clinical services that keep the spa running smoothly and efficiently. These include: Administrative support: The MSO can manage daily operations, coordinate staff, and ensure compliance with healthcare regulations. Payroll and human resources: It may handle staff payroll, hiring, onboarding, and benefits administration for non-clinical employees. Marketing and advertising: The MSO can promote the med spa’s brand, develop marketing campaigns, and manage digital and print advertising, while avoiding any claims of medical outcomes without physician approval. Office space and equipment leasing: It can lease and maintain office space and arrange for medical and non-medical equipment used in the facility. Scheduling and front desk operations: The MSO can oversee appointment booking, receptionist tasks, and client intake processes. Billing and collections (non-clinical): It may manage payment collections for cosmetic or elective services that do not involve third-party insurance billing. Vendor and supply management: The MSO can handle relationships with product vendors and ensure adequate inventory of medical and spa supplies. IT support and software systems: It can maintain practice management software, electronic health records systems, and other IT infrastructure. Financial reporting and bookkeeping: The MSO may oversee accounting, generate financial statements, and track revenue and expenses for the business. Staff training (non-medical): It can organize training programs for front office staff, receptionists, and management personnel in areas like customer service and HIPAA compliance. What the MSO Cannot Do? While the MSO is instrumental in managing the business side of a medical aesthetics practice, it must strictly avoid any involvement in clinical practice or medical services. Under CPOM laws, here are some things the MSO cannot do: Provide or supervise medical treatments: The MSO cannot administer injectables, perform laser therapy, or oversee any clinical care. Employ or control medical professionals: Physicians, nurse practitioners, physician assistants, and registered nurses must be hired and supervised by the medical entity, not the MSO. Make medical decisions or set clinical protocols: Only licensed clinicians may create treatment plans, determine clinical procedures, or alter care protocols. Diagnose, treat, or prescribe: The MSO cannot be involved in any form of diagnosis or prescription, which are strictly medical functions. Influence patient care or outcomes: Business personnel must not influence clinical outcomes, patient decisions, or the type of treatment provided. Share in medical revenue tied to procedures: The MSO cannot receive compensation based on a percentage of medical income, as this may violate fee-splitting laws. Advertise services as “medical” without physician oversight: All marketing related to medical treatments must be reviewed or overseen by a licensed medical provider. Determine pricing for clinical services: Only the physician-owned medical entity can set prices for Botox, fillers, or other regulated medical procedures. Own the medical entity (in states with CPOM laws): The MSO may not have an ownership interest in the professional corporation or PLLC that delivers medical care. Represent the practice as a healthcare provider: The MSO should never present itself as the source of medical care. All medical services must be clearly attributed to the physician-owned entity. Core MSO Rules Med Spas Must Follow MSOs allow non-physicians to provide certain important business management and support services to a professional entity that delivers medical services, such as Botox, dermal fillers, and laser procedures. However, to remain compliant with healthcare regulations, it’s essential that both the MSO and the medical practice follow specific rules that govern their relationship, especially when it comes to dividing medical interests from business operations. They include: Separation of Clinical and Management Services One of the most important rules for operating under an MSO model is the strict separation of clinical and management services. Only licensed physicians, nurse practitioners, and physician assistants are allowed to engage in the clinical practice of medicine. The medical doctor or medical director must retain full control over medical decisions, including informed consent practices, treatment planning, good faith exams, and supervision of medical procedures. The physician is also responsible for staffing clinical personnel, developing clinical protocols, and ensuring patient safety and ethical standards in patient care. On the other hand, the MSO is permitted to handle non-clinical business operations. This includes marketing, administrative functions, financial management, office space leasing, human resources, and managing payroll for non-medical staff. The MSO may also implement practice management software, oversee medical equipment logistics, provide IT support, and manage vendor relationships. These duties help improve operational efficiency while keeping the MSO away from any direct involvement in medical treatments or medical decisions. Compliance With Corporate Practice of Medicine (CPOM) Laws Every MSO arrangement must comply with corporate practice of medicine restrictions, which are designed to prevent non-physicians from owning or controlling medical practices. These state laws ensure that only healthcare providers with the appropriate medical background make clinical decisions and supervise medical professionals. CPOM regulations are especially relevant in medical spas, where the line between cosmetic services and regulated healthcare services can blur. Some states, such as California and Texas, have detailed CPOM laws and allow MSO models under strict guidelines. Others prohibit any kind of ownership or control of a medical entity by a non-physician, making it critical to structure the business using a separate business entity for the MSO. Understanding and following state-specific laws is essential to avoid unfair business practices, loss of license, fines, or investigations by the medical board. Ultimately, the MSO must never represent itself as a healthcare provider or interfere in clinical practice. Fee Structuring Must Avoid “Fee Splitting” Another key area of concern in MSO arrangements is fee structuring, particularly in avoiding what is known as fee splitting. Fee splitting occurs when a non-physician entity receives a share of the medical practice’s revenue in exchange for referrals or general business services. This is illegal in many states because it can influence medical judgment and violate healthcare laws. To maintain regulatory compliance, MSOs must be paid based on fair market value for the key services they provide. Acceptable arrangements often include a fixed management fee or reimbursement based on actual costs and labor. This protects both the MSO and the medical entity from liability and ensures the relationship is built on ethical business practices. Management services agreements should clearly define the services rendered, the scope of the relationship, and the basis for management fees, all while complying with healthcare venture laws and avoiding any tie to clinical performance or volume. Licensing and Credentialing Only licensed physicians may provide medical services at a medical spa, and those medical providers must be credentialed and authorized under state laws. This includes all clinical staff involved in medical aesthetics, such as registered nurses, physician assistants, and nurse practitioners. The MSO cannot employ or supervise these providers nor can it play any role in decisions related to medical coding, diagnoses, or medical treatments. If a non-physician crosses into the territory of providing or directing medical services, it may be considered unlicensed practice of medicine. This is a serious violation that could lead to fines, criminal penalties, or the shutdown of the entire operation. Therefore, all medical spa owners and MSO operators must clearly define the boundary between the business side and clinical side. This ensures that healthcare providers handle the medical services and the MSO remains focused solely on support services. How Do MSO Rules Vary by State? MSO rules for medical spas can vary significantly depending on the state laws governing the corporate practice of medicine (CPOM). States like California, Texas, and New York are known for having some of the strictest CPOM restrictions, making it illegal for non-physicians to own or control any part of a medical practice that provides medical services. In these jurisdictions, only licensed physicians or properly structured professional entities may own or direct the clinical practice. This includes medical decisions, patient care, medical treatments, and supervision of medical professionals like registered nurses, physician assistants, and nurse practitioners. Because of these strict regulations, the Management Services Organization (MSO) model in states like California must be carefully tailored to ensure that the MSO operates strictly on the business side of the practice. The MSO may provide management services such as marketing, office space leasing, human resources, financial management, and IT support, but it must avoid any involvement in clinical practice, including medical coding, setting medical protocols, or determining pricing for medical procedures. Contracts like a Management Services Agreement (MSA) must reflect fair market value for services rendered and avoid any arrangements that could be interpreted as fee splitting. In contrast, some states are more flexible with CPOM laws and allow greater collaboration between non-physician investors and medical entities, though even in these states, medical decisions must remain under the control of a licensed medical doctor or medical director. For example, in states with relaxed CPOM enforcement, limited liability companies may be used creatively to structure healthcare ventures, but care must still be taken to maintain proper separation between medical services and business operations. Because state-specific regulations and interpretations of CPOM laws can differ greatly, it’s best to consult with local legal counsel experienced in healthcare law, particularly in medical spa compliance and regulatory guidance. A qualified attorney can help structure your MSO and professional entity properly, ensure that your practice management software, marketing strategy, and management fees are compliant, and protect your business from regulatory violations, malpractice insurance issues, and medical board investigations. How Can You Keep Your Med Spa MSO Compliant? To ensure your medical spa and Management Services Organization (MSO) remain compliant, it is important to build a structure that respects the boundaries between medical services and business operations. First and foremost, always consult with experienced healthcare attorneys who understand the intricacies of state laws, CPOM regulations, and medical spa practices. Legal guidance at the outset of your healthcare venture can help you avoid costly mistakes and regulatory violations. It is also important to clearly define and separate the two legal entities: the professional entity that delivers medical treatments, and the MSO that handles the administrative functions. The medical entity must be owned and controlled only by licensed physicians or otherwise qualified medical professionals, while the MSO should be a separate business entity that provides management services like marketing, office space, financial management, and practice management software. These roles should be outlined in a carefully drafted Management Services Agreement (MSA) that reflects fair market value and avoids illegal fee-splitting arrangements. Financial independence is another cornerstone of compliance. Your MSO should not receive revenue tied to medical procedures or patient care, and all payments must be structured as fixed or cost-based management fees to ensure regulatory compliance. Finally, schedule regular legal compliance audits to review your business structure, operations, and contracts. These checks can help catch issues before they escalate into violations involving the medical board, malpractice insurance risks, or allegations of unfair business practices. When Should You Hire a Lawyer for Your Med Spa MSO? A healthcare attorney should be part of your team early on, not just when trouble hits. Here are key moments when legal guidance is essential: When starting a new med spa: Before launching your healthcare venture, legal advice is critical for setting up compliant ownership structures and avoiding violations of corporate practice laws. When forming or reviewing an MSO agreement: A healthcare attorney can draft or review your Management Services Agreement (MSA) to ensure that roles, payments, and responsibilities between the MSO and medical practice are clearly and legally defined. During state investigations or audits: If your medical spa is facing scrutiny from the medical board, health department, or other regulatory agencies, you’ll need legal representation to protect your license and operations. If you’re unsure who should “own” what part of the business: Ownership and control must be carefully split between the clinical practice and the MSO. A lawyer can help ensure that only licensed physicians are making medical decisions, while non-physicians stay on the business side of things. Common Legal Mistakes With MSOs in Med Spas Below are common legal mistakes you should avoid with MSOs in med spas: Co-mingling clinical and non-clinical finances: One of the most frequent compliance errors occurs when the medical practice and Management Services Organization (MSO) fail to maintain separate financial accounts. This can blur the line between medical services and business operations, creating exposure to violations of corporate practice of medicine (CPOM) laws and risking sanctions by the medical board or other regulatory bodies. Letting the MSO influence medical decisions: Under no circumstances should an MSO control or direct patient care, clinical protocols, or medical decisions. Only licensed physicians, nurse practitioners, or physician assistants working under proper supervision can provide medical treatments. If the MSO crosses this line even unintentionally, it can result in claims of practicing medicine without a license. Poorly drafted MSO agreements: A weak or vague Management Services Agreement (MSA) can lead to confusion over responsibilities, improper delegation of authority, and violations of healthcare laws. Your MSA must clearly outline the MSO’s role in areas like marketing, office space, human resources, and practice management software, while making it clear that the medical professionals retain control over all aspects of the clinical practice. Revenue-based compensation that risks fee-splitting violations: Tying MSO compensation to a percentage of the medical spa’s income from medical procedures is a major red flag. This is often considered illegal fee splitting, especially in states with strict CPOM rules like California, Texas, and New York. Instead, MSOs should be compensated through fair market value or fixed management fees based on specific key services provided. Don’t Risk Legal Trouble – Set Up Your MSO the Right Way Setting up a Management Services Organization (MSO) for your medical spa can be a powerful way to grow and streamline your business, but only if done correctly. Without clear legal boundaries between medical services and management services, you risk violating corporate practice of medicine (CPOM) laws, exposing yourself to regulatory investigations, medical board scrutiny, and potential loss of licensure or revenue. When properly structured, an MSO allows non-physicians to participate in the business side of the med spa, handling everything from financial management to office space, human resources, and marketing. This ensures that licensed physicians and other medical professionals retain full control over patient care, medical procedures, and clinical decisions. With a well-drafted Management Services Agreement (MSA), a compliant legal entity structure, and ongoing legal oversight, an MSO becomes a smart, strategic tool rather than a legal liability. FAQs About MSOs and Med Spas Who Can Own a Medical Spa? Only licensed physicians or approved healthcare providers can legally own the medical side of a med spa in states with corporate practice of medicine (CPOM) laws. Non-physicians can own an MSO that manages non-clinical business operations. Can a Non-Doctor Own a Med Spa? Non-doctors cannot own clinical practices, but they can legally own and operate MSOs that provide management services to medical entities as long as they do not influence medical decisions. What Are the Benefits of an MSO? An MSO allows licensed physicians to focus on patient care, while the MSO handles administrative functions like marketing, payroll, and office operations. It also enables non-physician investors to legally profit from a med spa without violating healthcare laws, while improving operational efficiency and scalability. Can I Make Money From a Med Spa if I’m Not a Physician? Yes, non-physicians can earn income through fixed or fair market value management fees via an MSO, but cannot receive a percentage of revenue tied directly to medical procedures. Do Med Spas Need an MSO? Med spas may not legally require an MSO, but in states with corporate practice of medicine (CPOM) laws, it’s often the only compliant way for non-physicians to participate in ownership and management. An MSO ensures the business side is separated from the clinical practice, protecting both parties from legal risks. What Happens if I Violate MSO Rules? Violating MSO rules can result in regulatory investigations, medical board sanctions, civil penalties, or even criminal charges for unauthorized practice of medicine or fee splitting. How Much Control Can an MSO Have? An MSO can control administrative functions like marketing, staffing (non-clinical), financial management, and office operations, but cannot direct patient care, hire medical professionals, or set clinical protocols.
June 24, 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
Healthcare
Durable Medical Equipment Compliance
Durable Medical Equipment (DME) refers to medically necessary devices intended for repeated use, often prescribed by physicians and reimbursed by Medicare, Medicaid, or private insurers. Because DME plays a direct role in patient treatment, and often involves federal reimbursement, the industry is tightly regulated. The DME industry is governed by a complex web of federal and state regulations, and failing to comply isn’t just a bureaucratic misstep. This is because failing to comply can lead to shutting your business down entirely. From FDA oversight to CMS supplier standards, billing compliance, and fraud laws, every stage of your product’s lifecycle is under scrutiny. This blog will break down what counts as Durable Medical Equipment (DME) and why legal and regulatory compliance is critical for every DME company. We will also share the key compliance areas you need to know. What Is Durable Medical Equipment (DME)? Durable Medical Equipment (DME) refers to medical devices designed for long-term use, prescribed by a licensed healthcare provider to aid in a patient’s daily activities or treatment plan. DME must meet some specific criteria, such as being durable, used for a medical purpose, not typically useful to someone who isn’t sick or injured, and appropriate for home use. Common examples of DME include wheelchairs and mobility scooters, hospital beds and home care beds, oxygen tanks and concentrators, CPAP machines for sleep apnea, nebulizers, suction pumps, and infusion devices. Walkers, canes, crutches, commode chairs, and patient lifts are also examples of DME. While prosthetics, orthotics, and medical supplies are also critical in healthcare, they are distinct from DME. Generally, prosthetics replace missing body parts, orthotics like braces or shoe inserts provide structural support, while supplies include disposable items like wound dressings or diabetic test strips. In contrast, DME is categorized separately due to its durability and long-term use in patient care. DME is often used by patients with chronic illnesses, mobility impairments, or those recovering from surgery. This includes seniors, individuals with disabilities, and people managing respiratory or neurological conditions at home. Because DME directly affects patient safety, quality of care, and medical outcomes, compliance is not just a regulatory box to check, but a moral and legal obligation. Equipment that is defective, improperly labeled, or sold without proper clearance can put patients at serious risk and expose manufacturers and sellers to devastating legal consequences. Who Can Create and Sell Medical Equipment Manufacturing and distributing medical equipment in the U.S. is heavily regulated by the FDA and other federal and state agencies. To ensure patient safety and maintain public trust, only qualified entities are permitted to make and sell DME. They include: Licensed Manufacturers: Only companies or individuals with appropriate licensing from regulatory agencies, such as the FDA, are authorized to manufacture medical equipment. These manufacturers must comply with rigorous safety, labeling, and production standards. Regulatory Approval: Before a medical device can be sold or distributed, it must go through the FDA medical device classification system (Class I, II, or III) and may require premarket notification (510(k)) or premarket approval (PMA) depending on the risk level. Quality Standards Compliance: DME manufacturers must comply with the FDA’s Quality System Regulation (QSR), which outlines processes for design control, production, process validation, complaint handling, and more. Many companies also adopt international standards like ISO 13485 to reinforce quality assurance. Distributors and Suppliers: Distributors must have valid business licenses and ensure that all medical devices they sell are FDA-compliant and properly labeled. They are responsible for tracking, reporting adverse events, and ensuring storage conditions meet safety requirements. Healthcare Providers and Pharmacies: In certain cases, licensed healthcare providers and pharmacies may sell or dispense DME directly to patients. However, they must still comply with state and federal laws, including billing regulations if products are reimbursed by Medicare or Medicaid. Registration Requirements: All manufacturers, repackagers, relabelers, and sellers must register their establishments with the FDA and list the devices they market. This ensures traceability and accountability throughout the device lifecycle. Importers and Exporters: Medical device companies that import or export DME must navigate both U.S. regulations and international compliance standards. This includes documentation, labeling, and proper declarations at customs. Compliance with State Laws: In addition to federal laws, each U.S. state may have its own licensing requirements and DME supplier regulations. Some states require Board of Pharmacy permits or separate registration processes for DME businesses. Prohibited Sellers: It is illegal for unauthorized individuals or unlicensed companies to manufacture or sell medical equipment. Doing so can result in FDA enforcement actions, civil penalties, criminal charges, and business closure. What Happens If You Don’t Comply With DME Regulations? Operating a durable medical equipment (DME) business without full compliance is both risky and catastrophic. From financial penalties to loss of your ability to bill Medicare and Medicaid, the consequences of non-compliance with federal regulations can destroy a business and damage your reputation beyond repair. As a durable medical equipment provider, your compliance obligations span multiple layers, including FDA rules, CMS reimbursement guidelines, and state licensing requirements. Failing to meet these standards can quickly trigger investigations by the Office of Inspector General, audits by federal healthcare programs, and even civil and criminal penalties. If your DME company submits reimbursement claims for products that lack medical necessity, or if you operate without a proper DME license, you risk being removed from federal healthcare benefit programs altogether. Losing the ability to bill Medicaid services or Medicare beneficiaries can immediately stop revenue flow, placing your entire operation in jeopardy. Worse still, improper billing, lead generation arrangements, or marketing practices that violate the Anti-Kickback Statute or Stark Law can result in lawsuits, criminal penalties, and publicized disciplinary actions that permanently stain your brand. The risks go beyond just financial loss. Distributing faulty or non-compliant medical equipment, such as hospital beds, portable oxygen equipment, or other devices intended for long-term patient use, can lead to patient harm. When a durable medical device fails or is improperly authorized, the patient pays the price. Why Compliance Matters in Durable Medical Equipment Your DME business must adhere to a maze of compliance requirements, including FDA rules for medical devices, CMS billing policies, and state law mandates on licensure and disclosures. Navigating these rules often requires conducting internal monitoring, implementing written policies, and ensuring HIPAA compliance to safeguard protected health information. For companies engaging in marketing, especially with a lead generation company, obtaining disclosure and written authorization is essential to avoid improper payments and associated penalties. The financial implications of noncompliance are massive. Denied claims, regulatory fines, costly penalties, and interrupted revenue cycles can leave even well-established DME companies scrambling. Developing corrective action, responding promptly to government inquiries, and working with a knowledgeable compliance officer or compliance team are essential steps to reduce risk. In many cases, forming a compliance committee and conducting effective training for staff can provide early warning signs before problems escalate. However, these are intricate steps, best handled under the guidance of experienced legal counsel. With years of experience helping DME suppliers, medical practices, and DME retailers build legally sound operations, our team helps providers obtain accreditation, manage licensing needs, and stay compliant with both federal law and state regulations. Whether you’re dealing with marketing materials, complex financial relationships, or need help understanding how to bill Medicare on a case-by-case basis, we can help you design effective compliance measures from day one. Compliance is also a matter of ethics and patient trust. The patients using your oxygen equipment, mobility devices, and other DME rely on providers who operate transparently, legally, and with care. When your organization implements strong compliance systems, you show that patient safety is not an afterthought. That integrity goes a long way in building your reputation among healthcare partners, referral sources, and regulators. Regulatory Framework for Durable Medical Equipment Compliance Understanding the regulatory framework for durable medical equipment compliance is critical for every DME business operating in the healthcare industry. Failure to adhere to your compliance obligations can result in civil and criminal penalties, denied reimbursement claims, and significant disruptions to business operations. That’s why successful DME companies must build a strong compliance team, implement written policies, and stay vigilant through conducting internal monitoring and continuous education. Which Regulatory Bodies Oversee Durable Medical Equipment? Multiple government agencies and recognized organizations oversee the regulatory compliance of medical equipment in the United States. There is The Centers for Medicare & Medicaid Services (CMS) that plays a central role in defining how DME is billed, what documentation supports medical necessity, and what standards DME suppliers must meet to maintain billing privileges under federal healthcare benefit programs. Losing access to CMS programs can be devastating for DME retailers, especially those relying heavily on Medicare beneficiaries for revenue. Then there is the Food and Drug Administration (FDA) that governs the safety, labeling, and classification of medical devices, including durable medical products. Depending on the type of equipment, manufacturers must meet the FDA’s quality system standards and may require premarket notification or approval. Operating without proper FDA clearance or failing to meet quality standards can subject your organization to criminal penalties and product recalls. Similarly, the Office of Inspector General (OIG) monitors for fraud, waste, and abuse across federal healthcare programs. DME providers that engage in improper billing, improper payments, or questionable lead generation arrangements may be investigated and penalized under well publicized disciplinary guidelines. OIG also issues advisory opinions and provides compliance education to reduce risk. Furthermore, accrediting organizations like The Joint Commission and other agencies approved by CMS offer formal accreditation for DME suppliers. Achieving this accreditation not only fulfills certain regulatory requirements but also enhances your business’s credibility. To obtain accreditation, a DME company must demonstrate effective compliance measures, such as a functioning compliance committee, effective training programs, and clear protocols for addressing compliance challenges. What Are the Key Laws and Regulations for Durable Medical Equipment Compliance? Several laws and regulatory codes directly impact how DME suppliers operate. The Medicare Conditions of Participation (CoPs) set forth the basic rules that must be met for participation in Medicaid services and Medicare. These conditions affect everything from clinical documentation and prior authorization to how DME is dispensed and billed. Adherence to CoPs is critical for maintaining eligibility under federal healthcare benefit programs. Likewise, the 21 CFR (Code of Federal Regulations), particularly Title 21, outlines the FDA’s standards for medical devices and the required manufacturing, labeling, and post-market surveillance processes. Failing to meet these federal regulations can lead to product seizures, warning letters, and even the shutdown of operations. Another essential law is the Health Insurance Portability and Accountability Act (HIPAA). DME companies must maintain HIPAA compliance when handling protected health information (PHI). Furthermore, the federal anti-kickback statutes and the Stark Law impose strict rules on financial relationships between medical practices, DME businesses, and referral sources. How to Stay Compliant With Durable Medical Equipment Regulations Staying compliant with durable medical equipment regulations is not just about avoiding penalties, but also about protecting your patients, your business, and your standing within the healthcare system. Below are helpful tips: Understand and Follow Regulations Effective DME compliance begins with understanding the complex network of federal regulations and state laws that affect your medical equipment operations. Every durable medical equipment DME company must be proactive in keeping up with changing compliance requirements. Key agencies like the FDA, CMS, and state departments of health set the rules that govern DME suppliers. These federal and state entities define how to handle medical necessity, prior authorization, and equipment classifications under various federal healthcare programs. Ignorance is not an excuse when you’re facing civil and criminal penalties. Maintain Licensing and Accurate Documentation All DME businesses must hold the proper licenses, including a valid DME license, and in some cases, a pharmacy license. In addition to obtaining licensing, companies are responsible for maintaining detailed records related to equipment orders, patient usage, and delivery confirmations. These documents serve as your defense against allegations of non-compliance, improper payments, or reimbursement claim fraud. Keeping these records organized and regularly reviewed should be a key responsibility for your compliance officer or compliance team. Implement Effective Billing and Coding Practices Accurate billing is essential to maintaining your status as a trusted provider under federal healthcare benefit programs. Using the correct HCPCS codes for every product reduces the risk of claim denials, audits, or accusations of fraud. DME companies must monitor each submission for compliance with CMS billing guidelines, especially when billing Medicare or Medicaid services. This is a vital step in reducing compliance issues and avoiding costly penalties or sanctions under the Anti-Kickback Statute and Stark Law. Train Your Team Continuously Ongoing education is a cornerstone of any effective compliance strategy. Your staff must receive effective training tailored to your medical practice, product lines, and the expectations of federal law. As laws shift, policies must be updated, and employees must be alerted promptly. Conducting effective training sessions also supports HIPAA compliance, proper documentation of written authorization requirements, and awareness of protected health information policies. A knowledgeable team minimizes human error and strengthens your compliance committee’s overall efforts. Conduct Routine Compliance Audits One of the most important compliance measures for any DME retailer or supplier is regularly conducting internal monitoring and audits. These checks help uncover areas of risk and ensure your documentation, coding, and processes align with industry standards. They also give your team the opportunity to respond promptly, fix errors, and develop corrective action plans before they turn into reportable violations. Consult Healthcare Lawyers for Legal Guidance Even the most experienced DME suppliers face complex situations that require legal interpretation. A specialized attorney like Cohen Healthcare Law helps clients interpret federal regulations, and manage enforcing standards when the stakes are high. Having access to legal counsel ensures you’re fully prepared for inspections, audits, or complaints from other agencies like the Office of Inspector General. The Future of Durable Medical Equipment Compliance One of the most impactful changes is the rise of automated documentation management systems. These digital platforms reduce the risk of non-compliance by securely managing patient care records and equipment logs, ensuring traceability from order to delivery. With integrated tools that track every aspect of device use, DME suppliers can maintain accurate documentation for reimbursement claims and prior authorization requests, which are essential for billing federal healthcare programs. Equally important is the use of compliance tracking software, which helps DME businesses monitor critical deadlines for license renewals, accreditation reviews, and internal audits. These systems reduce administrative burden while minimizing the chances of falling out of compliance with federal law, state regulations, or the rules set by agencies like CMS, the FDA, and the Office of Inspector General. Advanced electronic billing and coding systems are also revolutionizing how DME businesses manage HCPCS codes, reducing the frequency of errors that lead to costly penalties, claim denials, or civil and criminal penalties. These tools are often equipped with built-in checks that validate the medical necessity of items billed to Medicare beneficiaries or Medicaid services, making them indispensable for maintaining a clean billing record. For companies managing large inventories of medical devices, inventory management tools offer the ability to track product lifecycles, recall notices, maintenance schedules, and patient assignments. These systems help ensure that durable medical equipment is not only functional but also meets quality standards. This is critical for patient safety and for avoiding potential compliance issues under both federal regulations and state law. On the training side, e-learning platforms now provide DME teams with continuous access to policy updates and effective training modules tailored to their compliance challenges. Whether educating staff on the Anti-Kickback Statute, Stark Law, or HIPAA compliance, these tools support conducting effective training without disrupting daily operations. They also help compliance officers and compliance committees reinforce internal policies and prepare staff to respond promptly to compliance risks. As more DME businesses adopt data analytics and reporting tools, they’re gaining new insights into emerging compliance risks. By analyzing usage trends, billing patterns, and audit histories, DME providers can identify vulnerabilities and develop corrective action plans proactively. This kind of internal monitoring is crucial not only for meeting current compliance requirements but also for planning long-term strategies and aligning with well-publicized disciplinary guidelines. Finally, secure communication tools are enhancing collaboration among staff, legal counsel, and external partners. These platforms protect protected health information (PHI) while ensuring that important compliance conversations are documented and conducted legally. Is Your DME Business Fully Compliant and Protected? If you operate in the durable medical equipment (DME) industry, compliance isn’t just an operational task. It is a legal, financial, and ethical responsibility. With oversight from the FDA, CMS, and the Office of Inspector General, the pressure to meet strict regulatory compliance standards has never been higher. Implementing best practices such as conducting internal monitoring, maintaining accurate billing through HCPCS coding, staying up to date on state and federal law, and ensuring effective training across your team is essential. They protect your DME business from compliance issues, audits, and costly penalties. FAQ What Does Durable Medical Equipment Compliance Mean for Suppliers? DME compliance means that suppliers must follow all federal, state, and agency regulations related to licensing, billing, documentation, and patient safety. It ensures the business can legally operate, bill Medicare or Medicaid, and avoid legal or financial penalties. How Often Should DME Compliance Audits Be Performed? Internal audits should be conducted at least annually, though high-risk or fast-growing DME businesses may need quarterly reviews. Regular auditing helps catch issues early and ensures ongoing alignment with regulatory requirements. What Are the Most Common DME Billing Errors? The most frequent errors include using incorrect HCPCS codes, missing documentation of medical necessity, and submitting claims without required prior authorizations. These mistakes can lead to denied claims or trigger government audits. What Documentation Is Required for DME Compliance? Suppliers must keep accurate records of prescriptions, delivery confirmations, medical necessity justifications, prior authorizations, and billing submissions. Proper documentation protects against audits, denials, and fraud allegations. How Often Should DME Providers Update Their Compliance Training? Compliance training should be updated annually or whenever there are changes in federal or state regulations. Frequent updates ensure staff remain informed and help prevent unintentional violations. Do I Need a Healthcare Lawyer for DME Compliance? Yes, you need a healthcare lawyer for DME compliance. Navigating DME compliance involves complex legal standards and evolving regulations that require expert interpretation. A healthcare lawyer helps mitigate risk, prepare for audits, and build a compliant, scalable business model.
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
Estates and Trusts
Insulate Your Marriage From Problems Online
The Greek philosopher Socrates once said, “When the debate is lost, slander becomes the tool of the loser.” He was lucky he didn’t live in the age of Facebook. Thanks to the vast social network, it has never been easier to express an opinion about someone—however unflattering the sentiment may be. In addition to posting written words, it can also be hurtful to upload photographs and videos that were meant for a private audience. And when the object of online derision is an ex-spouse, the pain inflicted can be especially acute. After choosing a companion of good character, it can be hard to image that he or she would so publicly betray the confidences of life’s most important partnership. But the adversity of marital problems can change people, and it sometimes brings out the worst in them. How then can an engaged couple ensure that their relationship won’t end with cutting remarks and embarrassing images on social media? Drawing up a prenuptial agreement is actually a good place to start. A prenup can include a “social media clause,” which explains how spouses, and former spouses, should behave online. Regardless of how long two people may have been together, they will likely have accumulated a vast trove of private information about each other. If this information found its way onto Facebook, Instagram, Twitter, or the like, the result could be worse than hurt feelings. A career could be ruined, business prospects harmed, and social circles decimated. By including a social media clause in their prenuptial agreement, a couple can make their expectations for themselves clear when it comes to online postings. Some couples go so far as to say they won’t change their Facebook relationship status from “Married” until they agree the time is right. This is an important detail in protecting each other’s ability to control news of their transition to single status. A prenuptial agreement has never been the stuff of storybook romance, and many people think of it as a recipe for divorce. Heavy with legal language, the document outlines how assets and debts will be divided if the marriage breaks down. But the reality is that by clarifying matters like these before the wedding even takes place, both partners can help protect their legal rights and establish what will be required of them. Many even say that preparing their agreement was a surprisingly comforting experience. Think of it this way: A prenuptial agreement is like an airbag for your marriage. When you drive a car, you aren’t planning to have an accident, and having an airbag won’t make it any more likely that you will. But if an accident does occur, you will be grateful that you had this important piece of safety equipment and that it was working properly. In the same way, by having a prenup prepared, you aren’t inviting a divorce, and you certainly aren’t making it any more likely that your marriage ends in one. But if things don’t work out, you will thank yourself for having had the presence of mind to protect your legal rights—and your online privacy—when you had the chance. With marriage now legal for same-sex couples nationwide, there are many benefits to enjoy. One of them is having a piece of paper in the drawer that says what happens if things don’t go as expected. The first step is to call a lawyer with experience preparing prenuptial agreements. Once the agreement has been signed, you can enjoy the peace of mind that comes from knowing that you’re prepared for whatever lies ahead.
June 12, 2025
Healthcare
Clinical Trial Compliance Key FDA Regulations for Research Organizations
The intricate web of clinical trial regulations is meant to safeguard study subjects, assure the ethical conduct of research, and ensure the integrity of the scientific results. Any organization that undertakes the responsibility of conducting clinical studies must comply with the rules and regulations set down by three primary authorities: the Food and Drug Administration (FDA), the Department of Health and Human Services (HHS), and Institutional Review Boards (IRBs). Violating their mandates can have serious repercussions, yielding everything from delay to legal action to outright trial rejection. This article gives an overview of the important regulatory areas that research organizations must be aware of, such as the Food and Drug Administration’s 21 Code of Federal Regulations Parts 50 and 56, obligations involving informed consent and institutional review boards, and standards for good clinical practice. It also covers some recent enforcement trends. Understanding FDA Regulations: 21 CFR Part 50 and 21 CFR Part 56 Core requirements for clinical research, as specified by the FDA, are contained in two major regulations. The first is 21 CFR Part 50, which deals with informed consent. The second is 21 CFR Part 56, which governs Institutional Review Boards. In order to start, clinical trials must secure informed consent from every participant and obtain IRB approval. The trials themselves, of course, must adhere to GCP to meet basic regulatory expectations, especially from the FDA. Even with clear regulations, research organizations still encounter frequent issues such as these: Informed consent is not properly obtained. Oversight by the IRB is neglected. Reporting of adverse events or protocol deviations is shoddy. Informed Consent: A Cornerstone of Ethical Research It is not only a legal necessity, but also a basic ethical requirement to obtain valid informed consent. It is essential that participants understand exactly what they are getting into when they sign up to be part of a research study. That understanding requires parents when minors are involved, and serious discussions when the potential participants have limited capacities. Even then consent can have a shaky foundation when the study design is complex, or the risk is high. For informed consent to be legally robust, plain language must be used; participants must be provided with enough time to ask questions; and a written, signed copy of the consent form must be given to the participant. See detailed guidance from the FDA. Related HHS regulations can be found here. IRB Oversight: Protecting Participants and Upholding Integrity The critical role of protecting research subjects falls to Institutional Review Boards. IRBs review research protocols and grant the necessary approvals so that work can proceed. They do this, of course, with the intent of limiting and minimizing risks to research subjects. It is the responsibility of these boards, also, to ensure that consent is truly informed and that the subjects understand what they are agreeing to. And finally, these boards have a responsibility to monitor the kinds of events that might be considered adverse. Researchers must submit detailed protocols, keep accurate records of all IRB communications and approvals, and report any changes or adverse events quickly to steer clear of IRB compliance problems. A handy resource is the FDA’s FAQ guide on IRB regulations. Good Clinical Practice: Building the Foundation for Quality Research GCP is an internationally accepted standard for the protection of research subjects and the reliability of research data. The principles of GCP underscore the necessity of using qualified investigators, ensuring sponsor accountability, and maintaining accurate and complete records. You can improve adherence to GCP by conducting internal audits, training all research staff in GCP requirements, and using electronic systems to manage trial data and enable real-time oversight. For a more thorough investigation of the GCP resources available from the FDA, visit this site. FDA Enforcement: What Happens When Compliance Breaks Down The Food and Drug Administration takes noncompliance seriously, conducting routine inspections of clinical research sites. Frequent violations that the FDA finds include the following: Unreported adverse events Missing or incomplete informed consent forms Research conducted without IRB approval The risk of penalties from the FDA can be substantially reduced by organizations that do three things: they train their personnel, they keep records that are adequate to show compliance with the many requirements that apply to them, and they report all unexpected adverse events to the FDA. Here are some things to think about—as well as some real-world examples—when it comes to your organization’s training and recordkeeping efforts. Real FDA enforcement actions serve as powerful motivation. Ensuring Compliance in Every Trial Ensuring compliance takes an active, not a passive, approach. It means obtaining IRB approval prior to study launch, gaining informed consent from all participants, and adhering to GCP. It also means keeping good, readable records that allow necessary information to flow easily to the right people. A qualified healthcare attorney can help ensure compliance and prepare you for the inevitable audit or regulatory review. It’s critical to navigate the legal and regulatory landscape of clinical trial research for the success of the trials and the safety of the participants. Contact us today to make sure your clinical trial is in total compliance with all relevant regulations.
June 8, 2025
Estates and Trusts
Choosing Mediation to Protect Families and Legacies
Why Mediation? Blood and money make for a tough mix. As an attorney with a decades-long trusts and estates practice, I’ve seen it all: siblings clinging to childhood grievances, children from a first marriage resenting a stepparent, new spouses competing with adult children, and half-siblings emerging after a parent’s death. Estate litigation is not only lengthy and emotionally exhausting, it’s also extremely expensive. By the time the legal dust settles, the parties have often spent more on attorney fees than they’ll receive from the estate. Worse yet, already strained family relationships are often left permanently fractured. Seeing the damage these disputes inflict on families is what led me to seek certification as a mediator. What Is Mediation? Mediation is a voluntary form of alternative dispute resolution where parties work together to resolve conflict with the help of a neutral third party—the mediator. The mediator doesn’t make decisions like a judge or jury. Instead, their role is to guide the parties toward a mutually acceptable agreement crafted on their own terms. Because the outcome is collaboratively reached, mediation often leads to less bitterness, fewer hard feelings, and more durable resolutions. How Does Mediation Work? The process begins with an initial meeting between the mediator and the parties. If attorneys are involved, the mediator may speak with them beforehand to gather background information. During the joint session, the mediator explains the process and invites each party to share a brief summary of the situation from their perspective. An agenda is then established. Each party is encouraged to listen respectfully to the other’s point of view. Following this, the mediator typically meets privately with each side to delve deeper into the issues, explore underlying tensions, and identify opportunities for resolution. This approach allows for creative settlements that courts may not be able to impose. Importantly, mediation is fully confidential. Nothing disclosed during the process is admissible in court should the mediation not result in a settlement. Why Choose Mediation? Cost-Effective: Mediation is significantly less expensive than litigation. While parties may still retain legal counsel, the process usually requires fewer billable hours and avoids extensive court procedures. Mediator fees are typically shared equally by the parties. Efficient: Court cases can drag on for months or even years. Mediation often resolves disputes in a matter of hours or days. Private: Unlike court proceedings, which generate public records, mediation is confidential and discreet. Flexible: The parties—not a judge or jury—control the outcome. This allows for creative, personalized solutions that reflect the unique dynamics of the family. Relationship-Preserving: By encouraging open communication and cooperation, mediation can help mend strained relationships and preserve family ties. Mediation offers a path forward that is more cost-effective, efficient, and humane than litigation. In the emotionally charged arena of estate disputes, it provides families with an opportunity not only to resolve their legal issues but also to do so in a way that promotes healing, dignity, and when possible, reconciliation.
June 5, 2025
Business
Effectively Representing Entrepreneurs: Bridging the Gap Between Business and Law
Entrepreneurs represent a unique type of client for attorneys. They thrive on uncertainty, they move fast, and they see opportunities where many others see red flags. They often have a much higher risk tolerance, and they are visionaries who challenge the status quo, not only in the markets they disrupt, but also in the regulatory or legal frameworks that often cannot keep pace with innovation. For attorneys representing entrepreneurs, there can be a clear challenge as they struggle to bridge the gap between the law and the entrepreneur’s fast-moving world. Therefore, it is critical to remember that when working with entrepreneurs, the law is not the only seat at the table. Their legal counsel is just one of many voices in the room involved in making strategic decisions. Law, finance, insurance, product development, and growth marketing must all come together to make sound decisions and to create a path forward. Attorneys must understand this broader context and be able to operate within it. When advising entrepreneurs, it's not enough to say no or shut down ideas due to high risk levels. It is better to determine their tolerance for risk and develop a structure to make it work. Entrepreneurs don’t want a gatekeeper. They want legal counsel who can help them navigate the complexities of their world. Innovation Often Outpaces Regulation We have all seen that innovation frequently moves faster than the law. Just look at the incredible developments in AI over the past few years and the regulatory efforts that have significantly lagged the innovation in this space. We now see a patchwork of regulations across this country and on an international level. This highlights the point that an entrepreneur doesn’t always have the luxury of waiting for full regulatory clarity. They need legal counsel who can advise them on the current regulatory environment and help them anticipate and prepare for what the future might hold. Manage Risk, Don’t Eliminate It Entrepreneurial lawyering does not mean ignoring risk. It means identifying and managing risk, as well as helping the client embrace it in a calculated way. The idea isn’t to stifle innovation or kill ideas, but instead to make the big ideas viable within some parameters. There must be a mindset of managing risk smartly as opposed to avoiding risk at all costs. When attorneys can help entrepreneurs to see the legal implications of their decisions without shutting them down, they create the kind of trust that defines a successful attorney-client relationship. The Importance of Understanding Business Entrepreneurs want legal counsel who speaks their language and understands the many moving parts that make up their world. To have a seat at the entrepreneur’s table, it is essential to fully understand how legal decisions will impact their business objectives. This requires attorneys to evolve beyond just providing traditional legal advice and to move from the singular role of legal advisor to the multifaceted role of business advisor, risk strategist, and trusted partner throughout the entrepreneurial journey. There will always be a gap that exists between business and the law, as legal frameworks and regulations serve as roadblocks to the next big ideas coming out of startups. But great attorneys build bridges, not walls. They don’t ignore the law, but instead help entrepreneurs to navigate it with clarity, creativity, and awareness.
June 2, 2025
Estates and Trusts
Protecting Legacy: Privacy and Estate Planning Tips for Athletes
Professional athletes face unique challenges when it comes to managing their personal, professional, and financial affairs. With significant public visibility, substantial income, a grueling training schedule, and a fast-paced lifestyle, athletes need to protect both their privacy and their legacy. Whether the athlete is just beginning their professional career or, like many of my clients, has already cemented their place into athletic history, effective estate planning and privacy protection can shield the new or long-established professional athlete from risk and exposure, providing long-term peace of mind. Why Privacy and Estate Planning Matter for Athletes There are many reasons why privacy is more of a priority for professional athletes than those in the general public. First and foremost, athletes experience intense media scrutiny. Interviews following each event, reporters covering their personal and family lives, bloggers commenting on their lifestyle, and their family members’ every move. This scrutiny often occurs “overnight” without providing the athlete and their family the opportunity to adjust and ease into this new level of inquisition. Added to the sudden celebrity, the athlete’s career span is generally shorter than the rest of us, which means that the bulk of their earnings is realized in a very short window of time. The lifestyle change happens swiftly, and the duration is generally limited. Because of this compressed time schedule, the athlete has a short runway to transition into their new life, leaving them particularly vulnerable to lawsuits, predatory actors and financial scams. In addition to the sudden shift in assets and scrutiny, an athlete’s family dynamics can also suffer the consequences. Whether it is because the newfound wealth and fame represents a departure from their former life, which they shared with friends and family members, or because those friends and family members feel entitled to share in the of the athlete’s earnings, there is immense pressure. Therefore, creating a thoughtful, discreet plan that safeguards the athlete’s earnings is essential. Establish a Comprehensive Estate Plan As this author has covered in other articles, an estate plan goes beyond a simple Last Will and Testament. It includes a structure that provides the opportunity to manage wealth and guard privacy during the athlete’s lifetime, through the end of their career, and thereafter protects their families upon the death of the athlete. A Last Will and Testament directs how assets will be distributed upon death and names guardians for minor children, but it is not private. Wills are “published” in the court and can be viewed by anyone. A Trust can take the place of a Will because it also directs the distribution of assets upon the athlete’s death, but it is not published in court. Instead, it is a private instrument that is managed by the athlete’s designated trustee upon their death. During the athlete’s life, the trust can also manage the athlete’s assets. Trusts can hold real estate, stocks, bonds, and even NIL rights, which hold value long after an athlete’s career is over. For many athletes, we take it a step further and establish certain trusts in states that provide an extra layer of privacy and creditor protection. Proactive Privacy Protection Privacy for athletes is not just about dodging the paparazzi; it is about controlling the narrative surrounding their professional and personal reputation, in addition to safeguarding their financial information. Establishing Corporate Structures. The use of Limited Liability Companies and other corporate structures can hold real estate interests, vehicles, and investments instead of holding those assets in the athlete’s personal name. Those corporate interests can then be “funded” into a trust instrument, as explained above. Securing their Digital Footprint. The digital footprint is a new facet of an athlete’s legacy and must be considered. There are cyber companies (www.360privacy.io) that monitor on-line mentions, prevent hacking, and help remove destructive and false claims to protect the athlete’s reputation and legacy. Companies like Regal Credit (www.regalcredit.com) take protective measures to safeguard an athlete’s credit and financial assets, as well. Minimize public records – For real estate purchases, athletes can use tools like trusts and corporate structures to ensure that their names are not disclosed via public records. Planning for the Unexpected. The average career of a professional athlete is, by any definition, short: the NFL athlete’s career hovers just over three years, and the NBA athlete’s career lasts about five years. Athletes have the added risk of an even shorter career in the event of an injury or any number of other unforeseen events. Planning now helps avoid chaos later. Insurance. Connecting with a reputable insurance advisor can be game-changing to cover injuries and disabilities if the athlete is unable to play, even temporarily. Life insurance not only covers the athlete’s family upon death but can also be an opportunity for investment strategy, particularly when income is earned quickly but for a shorter duration. Some athletes even invest in liability insurance to protect themselves from extortion attempts. In fact, Ernst and Young report that professional athletes sustained almost $600 million in fraud and extortion-related losses from 2004 to 2019, a number that has continued to climb. Pre-nuptial agreements. We all know the statistics: one in two marriages ends in divorce. Athletes are no different, and the added stressors of constant travel, a grueling training schedule, and fame can make marriages particularly vulnerable and challenging to maintain. Prenuptial agreements are a must for athletes to ensure that their hard-earned savings are protected, even in the event of a divorce. Update Your Plan Regularly An athlete’s life and financial situation will evolve over time; income levels, contracts, relationships, and even states of residence change with great frequency. An athlete should revisit their plan immediately after signing a new contract, upon injury, following a major purchase, upon marriage, the birth of children, upon retirement or when starting a new business venture. A properly created plan should be nimble and easy to update. Work with a Trusted Team As with any team sport, you should not go it alone. An athlete’s privacy and estate strategy should be guided by an experienced estate planning attorney, a licensed financial professional, a tax advisor, a security and privacy consultant, and an insurance professional. Athletes work hard to build a legacy on and off the field. By taking a proactive approach to privacy and estate planning, athletes can protect their assets, support their loved ones, and maintain control of their personal legacy.
May 30, 2025
Bankruptcy
Acquisition Strategies: Navigating Section 363 Sales and the Impact of Undersecured Liens
Overview and Advantages Section 363 of the Bankruptcy Code allows a Chapter 11 debtor to sell assets "free and clear" of existing claims, liens, encumbrances, and other liabilities. This provision facilitates expedited sales that might otherwise be hindered outside of bankruptcy proceedings. With a growing number of cases where courts allow a traditional asset buyer purchasing assets out-of-court to become liable for the seller’s liabilities, a court-approved sale of all or part of the seller’s assets brings distinct advantages. Among these advantages is the ability to take over favorable contracts and leases, even if they contain anti-assignment clauses. As a result, strategic buyers have the unique opportunity to purchase distressed assets inside of bankruptcy in a way that eliminates or reduces future liability because the bankruptcy court order approving the sale often expressly forecloses “successor liability” claims against a good-faith purchaser. Recent Notable Sales The versatility and legal protections offered by Section 363 sales make them an attractive option for strategic buyers and distressed companies, regardless of their industry or size. From pharmaceuticals and biotechnology, clean energy to retail, one can find multiple examples of successfully closed sales. Merz Pharmaceuticals' Acquisition of Acorda Therapeutics' Assets Merz Pharmaceuticals, LLC subsidiary of Merz Therapeutics, completed the acquisition of key assets, including two FDA-approved medications for neurological diseases like Parkinson’s and MS, from Acorda Therapeutics, Inc. on July 10, 2024, through a court-approved Section 363 sale in the Bankruptcy Court for the Southern District of New York. The transaction was valued at $185 million in cash. Teknor Apex Company's Acquisition of Danimer Scientific's Assets Teknor Apex Company completed the acquisition of substantially all assets of Danimer Scientific, Inc. under Section 363 as part of its Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. The winning bidder agreed to a total cash purchase price of $19 million and assumption of certain liabilities. Lucid Group's Acquisition of Nikola Corporation's Facilities Lucid Group, Inc. acquired selected facilities and assets from the bankruptcy estate of Nikola Corporation, a manufacturer of electric and hydrogen-powered trucks, including Nikola's manufacturing facility in Coolidge, Arizona, and its Phoenix headquarters, totaling over 884,000 square feet of real estate, to expand its electric vehicle (EV) manufacturing and testing operations. Gonher Music Center's Acquisition of Sam Ash's Assets Mexican-based retailer Gonher Music Center acquired substantially all of Sam Ash's assets for $15.2 million in a 363 sale in 2024, following a competitive auction process. Gonher outbid E-Distributors Inc. after initially submitting a bid of $10.3 million for the e-commerce and wholesale assets, which subsequently increased to $15.2 million to secure the combined package. The assets included Sam Ash’s e-commerce operations, intellectual property, trademarks, customer data, and the wholesale Samson business. The sale excluded assets related to the store closing sales. Mondee Holdings' Asset Sale to Mondee Purchaser LLC Mondee Holdings, Inc., a travel technology company specializing in the leisure travel sector, both in the United States and internationally, sold substantially all of its assets to a newly formed entity, Mondee Purchaser LLC, backed by affiliates of its lenders TCW Asset Management Company LLC and Wingspire Capital LLC with the majority stake held by its former CEO. New York Case Spotlight: In re Urban Commons 2 West LLC What makes these asset sales possible is Section 363(f) of the Bankruptcy Code. Section 363(f) of the U.S. Bankruptcy Code allows a company in bankruptcy to sell estate property "free and clear" of liens and other interests, provided that one of five specific conditions is met: (1) applicable nonbankruptcy law permits the sale of such property free and clear of such interest; (2) such entity consents; (3) such interest is a lien, and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; (4) such interest is in bona fide dispute; or (5) such an entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. 11 U.S.C. § 363(f). Subsection 5 is particularly significant when dealing with "underwater" assets—those whose sale price is less than the total of the liens against them. A recent decision by Judge Bentley brings a little more peace of mind to asset buyers in New York bankruptcy proceedings. In re Urban Commons 2 West LLC, 22-11509 (Bankr. S.D.N.Y. March 4, 2025). The Urban Commons case involves the sale of the lease interests in Manhattan’s Battery Park City Hotel. The hotel was part of a mixed-use condominium building and subject to a ground lease with the Battery Park City Authority (BPCA). The hotel initially operated under the Ritz-Carlton brand, but in March 2018, it changed its brand to The Leading Hotels of the World and its name to The Wagner at Battery Park. The Debtors purchased the Hotel Lease Interests in September 2018 for approximately $147 million, of which $96 million was financed by a first mortgage issued by BPC Lender, LLC (the “Lender”). The loan matured in 2020, and the Debtors were unable to obtain refinancing. Later that year, following the onset of the Covid-19 pandemic, the hotel ceased operations and remained closed. By the time of the bankruptcy filing, the amount owed under the mortgage loan had grown to approximately $114 million plus fees and costs. The Debtors negotiated a global resolution with the main creditors, proposing a sale to the holder of the first lien on a $78 million credit bid and cash payments aggregating $20 million in cash to cure defaults on leases and contracts. The only objection to the sale and confirmation of the plan came from the holder of a $189,000 mechanic’s lien that was deeply underwater. The objector relied on an unpopular district court opinion, Dishi & Sons v. Bay Condos LLC, 510 B.R. 696, 710 (S.D.N.Y. 2014). In Dishi & Sons v. Bay Condos LLC, the Court held that subsection (5) applies only if the debtor, as the property owner, could compel the lienholder to accept monetary satisfaction. Judge Bentley rejected the Dishi court interpretation of Section 365(f)(5) because he held the construction was so narrow as to virtually nullify Section 363(f)(5). The Court adopted a “realistic possibility” standard, meaning that section 363(f)(5) encompassed not any conceivable hypothetical proceeding that might compel interest holders to accept a money satisfaction, but only proceedings that might realistically be brought in the case before the court if the automatic stay were lifted or did not apply. In most cases, this would include either foreclosure proceedings or UCC sales. The mere hypothetical possibility of an eminent domain taking would not satisfy section 363(f)(5). In conclusion, Section 363 sales offer a compelling avenue for strategic buyers to acquire distressed assets efficiently and with reduced risk. However, the nuances of Section 363(f), particularly subsection (5), underscore the importance of understanding jurisdictional interpretations. Stakeholders considering participation in a Section 363 sale must conduct thorough due diligence and engage experienced legal counsel to navigate the complexities of bankruptcy proceedings.
May 30, 2025
Labor and Employment
Workplace Violence: Why Employers Can’t Afford to Ignore the Warning Signs
When employers think about workplace safety, the conversation often begins and ends with OSHA inspections or slip-and-fall prevention. But in today’s world, the most urgent threat to your workforce isn’t on the floor. It’s in the atmosphere: workplace violence. Violence doesn’t just mean active shooter scenarios. It includes verbal threats, stalking, physical intimidation, domestic abuse that spills into the workplace, and psychological harassment. These are not just personnel issues but legal liabilities waiting to explode. The Legal Landscape is Shifting and Employers Must Keep Up Under OSHA’s General Duty Clause, employers are legally required to provide a safe working environment free from recognized hazards, including the risk of workplace violence. Failing to act on known threats can result in citations, civil liability, and, in extreme cases, criminal exposure. Add to that claims for negligent hiring, negligent retention, workers’ comp exposure, ADA violations, and reputational ruin, and the stakes become even clearer. Laws are continuing to evolve. California’s 2024 mandate for Workplace Violence Prevention Programs (WVPPs) set a new national standard, and other states, including New York, are following suit. Employers must now demonstrate proactive measures, not reactive apologies when something goes wrong. The Red Flags are Rarely Subtle and Often Dismissed Nearly every workplace violence incident is preceded by clear indicators: escalating arguments, erratic behavior, hostile emails, or an employee voicing concern about a colleague’s conduct. What’s dangerous — and legally reckless — is waiting until someone crosses the line before acting. Employers are expected to prevent foreseeable harm, which means acting before tragedy strikes. Your First Line of Defense: a Written, Enforced Violence Prevention Policy Organizations of all sizes and industries must have a clear, written policy for workplace violence prevention. This is not just a formality. Your workplace violence prevention policy should: Define prohibited conduct with precision, including threats, intimidation, and harassment. Create safe, accessible, and anonymous reporting channels. Establish a transparent response protocol. Reinforce zero tolerance for retaliation. This is your legal and cultural foundation. Training is Not Optional! It is a Legal and Practical Imperative A policy that sits unread on a shelf offers zero protection. Managers, supervisors, and employees must be trained to recognize red flags, de-escalate conflict, and report concerns safely and effectively. Even a single hour of annual training has proven to materially reduce risk. Training must be specific, interactive, and mandatory. Where appropriate, combine it with harassment prevention or ADA accommodation training; do not treat it as a check-the-box exercise. High-Risk Moments Demand Heightened Vigilance Terminations, layoffs, and performance-based discipline are flashpoints for violence. Employers should: Plan separation meetings carefully. Consider having security present. Conduct high-risk terminations off-site or via video if needed. Offer Employee Assistance Programs (EAPs) where appropriate. The Right Team: Security, Legal, and Behavioral Health Professionals Working in Tandem Preventing and responding to workplace violence takes more than HR alone. You need a cross-functional team of: Security professionals who assess risk and implement physical safety protocols. Threat assessment experts (forensic psychologists, trained law enforcement) who evaluate risk and help strategize de-escalation. Employment counsel who understands the legal implications and can coordinate with law enforcement, courts, and insurers. Executive protection for high-profile or targeted employees. Each component must align under a single, integrated WVPP strategy. Real Estate and Isolated Work Environments Face Elevated Risk Industries like property management, real estate, and healthcare, where employees work alone, during off-hours, or interact frequently with the public, face unique and elevated exposure. Employers in these sectors must tailor policies, training, and security measures accordingly. Employer Liability is Real and Expensive Beyond OSHA citations, employers may face lawsuits alleging: Negligent hiring or retention. Failure to warn. ADA violations (e.g., mishandling mental health-related threats). Discrimination or retaliation for mishandled reporting. Employers cannot afford to be reactive. Workplace violence prevention is not about paranoia. It is about creating a culture of trust, accountability, and action. Employees are more likely to report threats when they believe the company will take them seriously. That alone can prevent tragedy. If your workplace violence prevention policy has not been reviewed in the last year or if your team has never been trained on recognizing or responding to threats, the time to act is now.
May 29, 2025
Labor and Employment
Non-Compete Ban for Maryland Healthcare Professionals Set to Take Effect July 1, 2025
Effective July 1, 2025, the second phase of Maryland’s restrictions on non-compete agreements and conflict of interest provisions for healthcare professionals will go into effect, targeting employers who provide direct patient care. This follows the earlier phase of the law, which banned non-competes for veterinary professionals beginning June 1, 2024. What Does This Mean for Healthcare Employers? Healthcare employers can continue enforcing non-compete provisions in agreements executed before July 1, 2025. However, starting July 1, any newly signed agreement that includes a non-compete or conflict of interest clause for a qualifying healthcare provider may be partially or wholly unenforceable, depending on compensation and job function. Key Provisions Under the Updated Maryland Statute Under the amended Md. Code Ann., Labor & Employment §3–716, Maryland continues to prohibit non-compete agreements for employees in any profession who earn 150% or less of the state’s minimum wage. The updated law expands these protections by banning non-competes for veterinary practitioners and veterinary technicians, as well as for licensed healthcare professionals who provide direct patient care and earn $350,000 or less annually. For healthcare professionals earning more than $350,000 annually, non-compete agreements are still permitted but now face strict limitations: they may last no longer than one year and must be limited to a geographic radius of 10 miles from the provider’s principal place of practice. The amended law also introduces a new obligation for employers: upon a patient’s request, they must disclose the new location of a former healthcare provider. Despite these expanded restrictions, the statute explicitly affirms that employers may still take steps to protect client lists and proprietary business information. Best Practices for Healthcare Employers In light of the upcoming change, employers should: Review and revise all employment agreements that will be signed on or after July 1, 2025 Ensure HR and recruiting teams are informed and using compliant templates Plan for patient communication procedures tied to provider transitions Use alternative protections—like confidentiality and non-solicitation agreements—to safeguard business interests. Even contracts signed before July 1 may still face scrutiny under Maryland’s reasonableness standard for restrictive covenants. Background on Non-Compete Reform The updated statute stems from House Bill 1388, passed in 2024 as part of Maryland’s growing effort to curtail restrictive employment practices in the healthcare and veterinary sectors. Nationally, the Federal Trade Commission’s (FTC) attempt to implement a broad non-compete ban across every industry remains in limbo after district court challenges blocked enforcement. In March, FTC attorneys filed motions requesting a 120-day stay of the agency’s appeals, citing the change of the presidential administration and a need to reassess its position under new leadership. It remains unclear whether non-competes will remain a policy priority at the federal level. As a result, state-level action, like Maryland’s, has become the primary driver of non-compete reform.
May 28, 2025
Commercial Litigation
Big News for Virginia Litigation: Jurisdictional Limits in General District Court Increased to $50,000
As of March 21, 2025, the Virginia General Assembly and Governor have approved a significant change to Virginia’s civil and commercial court system. Every business owner, real estate professional, attorney, and claims adjuster should take note of the change. Under Senate Bill 1291, the jurisdictional limit for civil and commercial cases in Virginia’s General District Courts will increase from $25,000 to $50,000. The change will become effective July 1, 2025. This marks the first major adjustment to the jurisdictional limits in years and will have wide-ranging impacts on how civil and commercial disputes are litigated across Virginia. What This Means: More Cases in the General District Courts: Plaintiffs with monetary claims (such as debts or damages claims) up to $50,000 can now file in the General District Courts, which allows parties to benefit from faster dockets, less formal procedures, and lower litigation costs. Transfer Procedures Simplified: If a plaintiff later amends their claim to exceed $50,000, the law allows for a direct transfer to Circuit Court without the need for nonsuit or dismissal, preserving the statute of limitations. Attachment Cases Also Impacted: The $50,000 jurisdictional limit also applies to attachment cases (proceedings to seize property). Unlawful Detainers (Evictions), Interpleaders, FOIA Cases, and Property Owners Association Disputes Unaffected by change: The General District Court retains specific jurisdiction over these matters without being restricted by the $50,000 monetary cap. Why It Matters: This change is a major boost for access to justice. Litigants with mid-sized claims can pursue recovery in a court designed for efficiency without the high costs and extended timelines often seen in Circuit Court. This shift makes pursuing and defending civil and commercial claims more predictable and affordable for businesses, insurers, and individuals alike. At Offit Kurman, we are already preparing to help our clients navigate these changes strategically — whether it’s handling higher-value disputes in the General District Courts or advising on new litigation tactics made possible by the expanded jurisdiction. Reach out to Anders Sleight | Offit Kurman today to discuss your specific situation and how you may be able to take advantage of these changes. To prepare for the July 1 change, stakeholders should update litigation strategies, educate relevant staff on the new $50,000 limit and General District Court procedures, and reassess claims that may now qualify. Staying current on procedural updates will help businesses, insurers, and legal teams take full advantage of the court’s increased efficiency and lower costs.
May 28, 2025
Intellectual Property
Jimmy Page Accused of Infringing 'Dazed and Confused'
If the ongoing acrimony between Daryl Hall and John Oates wasn’t enough to fill the void of aging rock stars airing their grievances in court, never fear. There’s an endless well where that came from. Jake Holmes, original writer and composer of the song Dazed and Confused, has sued Led Zeppelin’s Jimmy Page, among other musical production and publishing entities, for damages related to a songwriting credit he feels he is owed. Indeed, Holmes wrote the now-iconic hit in 1967, at which time Jimmy Page heard the song and rearranged the composition for his then-outfit, The Yardbirds. Page would later work with Robert Plant to reimagine the song for their upstart band, Led Zeppelin, again neglecting to credit Holmes for his role in the song’s creation. Off the heels of a now-settled 2010 lawsuit regarding the issue, the recently released documentary, Becoming Led Zeppelin, has brought the song, and Holmes’ claims, back into public consciousness. Doubtless, Holmes wanted to strike while the iron is hot. Plaintiff Holmes filed a complaint in the U.S. District Court for the Central District of California, asserting three primary claims: two for copyright infringement and one for breach of contract. Holmes alleges he is the sole copyright owner of Dazed and Confused, originally registered in 1967. He claims that Jimmy Page and associated defendants, willfully infringed on this copyright by exploiting the composition without authorization—first in connection with the Yardbirds’ performances and later through its use in the 2025 documentary Becoming Led Zeppelin. Holmes's complaint alleges that, despite a 2011 settlement agreement (resolving the prior 2010 suit, which affirmed Holmes’s exclusive rights to the composition), Jimmy Page, Succubus Music Ltd., and WC Music Corp. continued to falsely license and monetize recordings of Dazed and Confused as if Page were the sole author. Holmes contends that these recordings include numerous Yardbirds live releases and that the defendants generated revenue from licensing, streaming, and royalties without proper attribution or payment to Holmes. Additionally, Holmes claims that the recent documentary film Becoming Led Zeppelin incorporated unauthorized performances of Dazed and Confused—both by the Yardbirds and by Led Zeppelin—again falsely crediting Page and excluding Holmes. He asserts that multiple defendants, including major production and distribution entities like Sony Pictures Classics and Big Beach LLC, participated in the infringing activity. Holmes seeks actual or statutory damages, injunctive relief, an accounting of profits, and attorneys' fees, alleging willful infringement and breach of the 2011 settlement agreement. This new action has the potential to set a standard for infringement cases regarding works so central to the infringing entity’s identity as to reframe that entity’s success completely. Time will tell whether Page’s Levee will finally Break, or whether Page and Zeppelin will Ramble On as they have for the past 50+ years.
May 28, 2025
Commercial Litigation
To Use or Not to Use? Fear Not! The Public Domain Beckons Thee
Ah, the public domain—where copyrights dare not tread, and content lives free from the litigious claws of infringement claims. Whether thou art a humble creator or a bold entrepreneur, rejoice! For in this blessed realm, you may pluck the ripest fruits of history without fear of lawyers whispering “cease and desist” in thine ear. As an experienced litigator who has spent years navigating the nuances of copyright and trademark disputes, I often receive inquiries from clients and creators alike asking whether using material in the public domain could still lead to legal liability. These questions are understandable—copyright law is notoriously complex, and the fear of receiving an infringement claim can chill even the most well-intentioned use of historical or creative works. However, the law is clear. Under the Copyright Act of 1976, 17 U.S.C. § 101 et seq., once a work has entered the public domain, it is no longer protected by copyright. That work may be used freely without permission or risk of infringement liability. This principle is further reinforced by judicial precedent and administrative interpretations issued by the U.S. Copyright Office. Below is a short—albeit Shakespearean—synopsis of the right-to-use works that have passed into the public domain. All the World's a Stage... and the Public Domain is Yours to Play Upon When a work enters the public domain, it is like King Lear abdicating his throne—no longer held by a single rights-holder but shared by all. You may quote, adapt, remix, or even set it to dubstep, should the spirits moves you. There is no need to “beware the Ides of Infringement,” for the legal ghosts have departed these works. A Rose by Any Other Name Would Still Be Royalty-Free From the Bard himself to silent films, early jazz, and vintage pulp novels, the public domain is a veritable treasure trove. If your heart desires to adapt Romeo and Juliet as a sci-fi space opera or turn Macbeth into a murder-mystery podcast, thou art free to do so. And should anyone protest, simply say: “The copyright hath shuffled off this mortal coil.” Much Ado About Nothing (To Pay) No fees, no permissions, no licensing headaches; using public domain content means your budget won’t suffer a tragic fate. You are free to profit, reimagine, or distribute at will without hearing the dreaded words: “Thou art summoned to court.” The Lady Doth Protest Too Much, Methinks! But Legally She Can’t If a work is truly in the public domain, no rights-holder can claim otherwise—not even an overzealous heir or a distant cousin twice removed who believes Great Uncle Will’s haikus should still be protected. Verily, if someone doth protest, remind them that the law is clear: once public, forever free. What Light Through Yonder Archive Breaks? More works enter the public domain each year, like clockwork, every January 1st. These cultural gems become part of the commons, waiting for creative minds to breathe new life into them. Whether thou art a playwright, podcaster, game designer, or meme-smith, this is your cue to take the stage. Parting is Such Sweet Sorrow (But You Can Keep the Content) So go forth, noble creator, and draw from the well of the public domain with confidence. For when it comes to these works, the law doth not bite its thumb at thee. “A Pox Upon Uncertainty: Better to Know Than to Be Woe” While the public domain offers a vast and invaluable reservoir of creative material, it is of paramount importance to confirm that a given work is, in fact, free of copyright protection before using it. Not all “old” content is automatically in the public domain; factors such as the date of publication, the country of origin, and whether proper formalities were observed can all impact a work’s legal status. Mistakenly using material that remains under copyright could expose a user to infringement claims, even if the misuse was unintentional. Therefore, before thou dost take up thy pen (or camera, or microphone), it is wise to consult with legal counsel. As with so many matters in the law, ’tis better to measure twice than to be sued once.
May 27, 2025
Labor and Employment
Virginia Expands Non-Compete Restrictions for Employers
Virginia Governor Glenn Youngkin has signed Senate Bill 1218 into law, amending the state’s non-compete statute. Effective July 1, 2025, the updated law will broaden restrictions on non-compete agreements in Virginia. Previously, the law only protected “low-wage employees,” or those earning less than the average weekly wage in Virginia. Under the new amendment, employers will also be prohibited from entering into non-compete agreements with “non-exempt employees.” These are workers who are entitled to overtime pay under the Fair Labor Standards Act. Under the new amendment, all non-exempt employees – regardless of their income level – will be covered by the Commonwealth’s prohibition on non-compete agreements. However, the amendment is not retroactive. Therefore, employers who have entered into non-compete agreements with non-exempt employees prior to July 1, 2025, will remain valid; any such agreements executed on or after July 1, 2025, will be prohibited by law. Moving forward, employers will need to ensure accurate classification of workers as either exempt or non-exempt under federal standards to avoid liability under the new amendment. Employers should review their policies on non-competes, particularly as applied to offer letters, severance agreements, and employee handbooks to ensure compliance with the amendment.
May 27, 2025
Intellectual Property
Building a Patent Strategy that Actually Works for Your Business
If your business relies on bringing innovations to market that generate returns on investment, then a well-designed patent strategy is critical for realizing those returns. Patents help introduce new products to the market, secure investment, and establish your business’s competitive edge, all supporting and controlling the top and bottom lines. A thoughtful patent strategy simply helps turn innovation into long-term business value. However, achieving this long-term business value requires you to consider patents as part of the big picture of your business; business goals, market dynamics, and product roadmap are all important. Patents are not simply a check-the-box activity or even pure costs; they are investments in the future of your business. But how do you turn patents--powerful legal rights-- into business value? Start With the ‘Why’ Before jumping into the legal process, consider what patents could do for your business. Do you need to: Protect the core technology that drives your revenue? Create barriers to entry for competitors? Support a licensing model or open new revenue streams? Make your business more attractive to investors, acquirers or strategic partners? If the answer is yes to any of the above, a proactive patent strategy deserves a place in your broader business plan. Timing is Critical Patent law rewards those who act early in the innovation process. In fact, certain activities can result in the loss of patent rights. It is important to file for patent protection for an innovation before disclosing your invention publicly, whether through a sale, publication, presentation, or even a demonstration. But timing is a balancing act. Concepts that are too general or have not undergone some level of technical and market vetting may not be ready for patenting, but filing too late, after public disclosure can be catastrophic. Aim to file for patent protection when you can describe a clear use case and the market can identify key technical features important for that use case and market, ideally before you raise funds or launch publicly. Today, product development often requires engaging third parties early in the process. Two tactical steps can be used to bolster your strategy and provide some flexibility in timing: Use non-disclosure agreements with third parties you need to share your concept with to get help File provisional applications if you want to secure a filing date while continuing to refine the invention. Think Beyond One Patent Your strategy shouldn’t stop with one patent application or even one type of patent. Patents grant you the right to exclude others from making, using, or selling the invention as claimed. But patents often are not broad blocking patents. Patents are often focused on incremental innovations, and patent law generally limits one patent per invention. Often, several inventions are built into a product, and robust protection would therefore require multiple patents. You may need to: Protect multiple components or processes within a single product. File in international markets where you plan to sell or manufacture the product. Keep an eye on adjacent technologies and file follow-on continuation patents as your product and market evolve. At least considering these options allows you to manage your patent strategy to your product roadmap, keep an eye on competitive threats, and help manage your patent more proactively. Patents are Investments, Not Costs Filing a patent isn’t just a line item on your legal budget — it’s an investment in your business’s future. Like any other asset, patents have the potential to generate returns, whether through increased valuation, market exclusivity, licensing opportunities, or strategic advantage. What makes patents more of an investment than just a budget line item? First, delaying or forgoing patents gives your competitors a free pass to use innovations you developed for their own gain. Without patents, competitors will capitalize on what your business introduced to the market, leaving little recourse for you after the fact. Those competitors can then file patents that could hamper your ability to sell your products. This has a direct impact on the topline and undermines R&D investment. Proactive patent protection avoids this altogether and serves as a competitive deterrent. Second, patents can help add revenue through licensing. However, licensing revenue is nearly impossible without legal rights protecting the products. Patents are an effective tool to support licensing or acquisition opportunities. Third, patents attract and retain capital. Investors always ask if the technology has protection. The larger the investments you seek, the more scrutiny will be placed on your patent strategy and how it relates to the technology supporting your innovations. Investors often look for competitive advantages, and patents provide that. Patents are assets and can help support business valuations that facilitate investment. Related to direct investments, patents can also act as collateral to secured transactions, facilitating investment or debt for financing other parts of the business. Without patents protecting your technology, you are forgoing an effective tool that drives investor confidence, which, in turn, drives investment in your business. A well-timed, well-aligned patent strategy doesn’t just protect what you’ve built, it helps justify and maximize the investments you’re already making in innovation. Treat patents as part of your business assets and budget for them accordingly. Encourage Internal Innovation An intentional patent strategy doesn’t just protect innovation, it helps fuel it. When your innovators know there’s a process in place to capture and evaluate their ideas, they’re more likely to share them. Encouraging your team to share and disclose ideas that may be patentable unlocks potentially patentable concepts that can support your business goals. A great way to maximize patent value is to create an invention disclosure system that harvests innovations within your organization while rewarding disclosure among your team. This can form the basis for an engaged team oriented towards protection innovation. An excellent supplement, patent seminars can help educate your staff about the patent process and what it takes to be an inventor under U.S. law. The Bottom Line A strong patent strategy isn’t about legal red tape; it's about creating leverage, supporting your growth, and building real, lasting value. Treating patents as an investment—not a cost—unlocks their full potential as a driver of innovation, funding and long-term success.
May 23, 2025
Healthcare
Mobile Health Apps Legal Compliance Essentials for FDA and FTC Standards
Apps that provide services such as telemedicine, fitness tracking, remote monitoring, and medication reminders are rapidly expanding within the burgeoning mobile health (mHealth) industry. But with this growth comes an increase in regulatory scrutiny. Developers, healthcare providers, and startups in this space need to be on guard because the law is looking much more closely at the nascent mHealth industry. And a lot of the apps we’re developing are now being classified as medical devices, with some of us on the borderline of telemedicine. This manual will take you through the basic legal factors involved in mobile health apps. It will help you figure out if your app is regulated by the FDA, how to manage patient data in a way that meets the requirements of HIPAA, and how to ensure that your app’s advertising practices are in line with FTC guidelines. You will also learn about state laws—in particular, telehealth and privacy laws—that may impact the operation of your app. 1. Determining If Your App Needs FDA Approval When a mobile health app meets the definition of a medical device according to 21 CFR 801, the FDA gets involved. If your app is intended to diagnose, treat, or prevent a disease or health condition, it likely comes under FDA oversight. Apps that are concerned only with general wellness or non-medical functions are usually not directed by the FDA. For instance, an application that measures blood pressure and works together with a medical device or one that employs AI to evaluate skin conditions might be classified as a medical device and need to meet FDA requirements. However, step counting apps or those promoting meditation generally do not require such measures. The complete guidance from the FDA can be reviewed. To avoid FDA regulation, think about these strategies: State clearly that your app is not intended to diagnose or treat any medical conditions. Ensure that any connected devices are already FDA-approved. Don’t use promotional language that suggests your app can prevent, diagnose, or treat disease. 2. Complying with HIPAA When Handling Patient Data If your app gathers, holds, or communicates protected health information (PHI), compliance with the Health Insurance Portability and Accountability Act (HIPAA) is a must. This is especially true if your app works with electronic health records (EHRs), collects medical histories or test results, or corresponds with healthcare providers in its user communications. Determine whether your application qualifies as a HIPAA-covered entity. To satisfy HIPAA mandates, you must encrypt stored data and data in transit. When you’re using cloud platforms, choose from those that are HIPAA-compliant—the Amazon Web Services (AWS) platform is well-known for this, as is the Google Cloud Healthcare API. Always get consent from users before you collect or share their health data. And for good measure, implement multi-factor authentication to ensure that only authorized users can access your systems. Learn more about how the Security Rule of HIPAA applies to mobile health applications. 3. Staying Compliant with FTC Marketing Rules When you assert that your app has capabilities that can affect the health of its users, you must be certain that those assertions are accurate, and supported by solid evidence. The Federal Trade Commission keeps a close eye on the marketing of health-related matters and does not shrink from taking action against misleading or overstated assertions. Common pitfalls consist of not stating clearly the actual effectiveness of the app (e.g., saying it cures insomnia), using testimonials and not having scientific backing to use them, and not disclosing connections between the app developers and the influencers or endorsers of the app. View the complete guidance issued by the FTC on the marketing of health products. An instance that is very well known is the FTC’s case against Lumosity in 2015. The company ended up having to pay $2 million because it had made dubious claims that its brain training games could stave off cognitive decline. For details, see this page. To prevent this type of enforcement, ensure that you support health claims with rigorous scientific research; include disclaimers when necessary, and always disclose any financial or promotional relationships. 4. State Privacy Laws and Their Impact on Health Apps Your app may still have obligations under state privacy laws even if HIPAA doesn’t apply to it. Laws protecting consumer data and imposing requirements on businesses collecting personal health information have been enacted in several states. For instance, the Consumer Privacy Act (CCPA) of California underscores the need for transparency and grants users the authority to refuse permission for the collection of their data. New York’s SHIELD Act mandates that companies implement sensible security practices to protect the information of their customers. Illinois’ Biometric Information Privacy Act (BIPA) regulates the gathering of biometric data, such as fingerprints and facial recognition. For your app to remain compliant, it should have a prominent and plain privacy policy, should give users an option to not share data, and should make sure that all biometric data are encrypted and collected only after the user has consented. To see privacy laws in various U.S. states, check this page. 5. Practical Steps for Legal Compliance Assess your app and its functions for FDA oversight. If what you’re doing is in any way similar to what an FDA-regulated company would do, then most likely you must comply with FDA regulations. The same logic applies to HIPAA (It’s All About Compliance, 2021). Your app, if it handles protected health information in a manner similar to what a healthcare entity would do, must comply with HIPAA. Noncompliance can be very costly. The Federal Trade Commission (FTC) regulates truth in advertising on a federal level. Your marketing efforts must be FTC-compliant. See a list of recent enforcement actions taken by the FTC and FDA against mobile health apps. Health mobile apps are in a highly regulated area, and not completing them can lead to serious legal problems—for instance, regulatory fines, consumers suing the company, or even removal of the app from the app stores. If you need help figuring out interaction with the FDA, HIPAA, FTC, or your state compliance for your health tech product, our legal team at Cohen Healthcare Law Group is here to help.
May 22, 2025
Labor and Employment
Weddings, Honeymoons, and Milestones: Employer Guidance for Time Off Requests
For HR leaders and business owners alike, the question is not whether employees will request time off for major life events, but when and how your organization will respond. Weddings, honeymoons, and personal milestones do not fall under FMLA or mandatory leave laws, but how you handle these moments speaks volumes about your culture, legal risk tolerance, and ability to retain top talent. There’s No Legal Right — But There Are Legal Risks It’s true: U.S. employers have no legal obligation under federal or state law to offer “wedding leave.” These events are not protected by the Family and Medical Leave Act (FMLA), paid sick leave laws, or any other statutory entitlement. But do not mistake a lack of mandate for a lack of risk. Employers who approve or deny time-off requests inconsistently, particularly in ways that appear to impact employees based on gender, race, religion, or other protected characteristics, may face claims under Title VII or state anti-discrimination laws. The U.S. Department of Labor (DOL) continues to emphasize enforcement around leave and accommodation policies that have a disparate impact. While “wedding leave” is not protected, your process must still comply with anti-discrimination and fair treatment standards. FMLA and Paid Leave Interaction: Be Clear on What Applies While weddings and honeymoons typically fall outside the scope of the FMLA, some related events might trigger protected leave. For example: Destination wedding involving a serious health condition (e.g., pre-surgical travel): FMLA may apply. Caring for a seriously ill spouse during or after a wedding or travel abroad: FMLA may apply. Employee illness or complications resulting in an inability to return to work: also potentially protected under FMLA. Moreover, the DOL recently clarified that when employees receive state or local paid family or medical leave benefits, employers cannot require them to simultaneously use accrued paid time off (PTO). This rule limits an employer’s ability to control how leave is structured when overlapping benefits are involved. Employers must understand the interplay between federal FMLA rights and state/local paid leave programs. Suppose an employee receives paid benefits through a government program (e.g., California PFL, DC Paid Family Leave). In that case, employers must designate FMLA leave when appropriate but may only allow PTO to be used as a supplement if mutually agreed, not mandated. Build Goodwill Without Losing Control Your policies should reflect both empathy and operational discipline. A wedding is not a frivolous request — it is a once-in-a-lifetime event that deeply matters to your employee. When employers respond with humanity and structure, it creates loyalty. That does not mean granting every request or disrupting workflow. It means having a clear, written policy that: Requires advance notice (e.g., 30–60 days). Reserves approval based on business needs. Clarifies whether PTO or unpaid leave may be used. Avoids any ambiguity about the consequences of overstaying approved leave. Consider including a “personal leave” clause in your employee handbook to address non-medical, non-FMLA, and non-emergency time off. Your language can be simple and clear: personal leave may be granted at management’s discretion, subject to operational needs. Watch Out for International Travel If the honeymoon involves international travel, extra scrutiny is warranted. Confirm the return-to-work date in writing before the employee departs, and clearly communicate that unapproved extensions may be treated as unexcused absences. Lingering COVID-era entry restrictions, visa issues, or logistical complications can cause delays, but those are not excuses for avoiding your leave policies. Where possible, plan backup support and document expectations in writing to avoid any disputes upon return. Small Gestures, Big Impact From a culture-building perspective, do not underestimate the power of a simple “Congratulations!” A card, a team mention, or a verbal note from leadership can make an employee feel valued. Some employers go a step further — offering a “wedding day off” or an extra PTO day. These gestures are optional, but impactful. Policy Consistency Is Your Best Defense If your leave policies are outdated, vague, or silent on personal time off, now is the time to revise them. Review and align them with current DOL guidance, FMLA regulations, and your state’s paid leave laws. Train your managers, document every request and response, and apply the same standards to every employee, regardless of role, relationship, or circumstance. Bottom Line for Employers Personal milestones matter to your employees and your business. They can create resentment, attrition, or even litigation when handled poorly. When handled well, they can build trust and reinforce culture. Be fair. Be clear. Be compliant. Be human. And most importantly, be consistent.
May 21, 2025
Immigration Law
Top Mistakes That Jeopardize Your Green Card—and How to Avoid Them
As we are currently in a time of extensive scrutiny of immigration actions, individuals must understand their status, rights and obligations. Legal Permanent Residents possess many protections that nonimmigrants do not have, but must carefully maintain their status. One of the key aspects of maintaining a green card is maintaining an existing “intent” to permanently reside in the United States. This is an issue that comes up with green card holders who move abroad or spend significant time outside of the United States. If the Department of Homeland Security (DHS) has reason to believe an individual does not have the intention to reside in the United States, then they can bring proceedings against the individual to remove their green card. The law and policy are summarized by the U.S. Citizenship and Immigration Services (USCIS) as follows: Permanent Resident Cards become technically invalid for reentry into the United States if the holder is absent from the United States for 1 year or more. U.S. permanent residence status may be considered abandoned for absences shorter than 1 year if the green card holder takes up residence in another country. The first point is technical; if one is out of the country for a year or more, their green card is no longer valid for entry. Customs and Border Protection (CBP) will raise this issue at the Ports of Entry to the United States. It can be waived at entry, but the CBP rarely allow that. Instead, they follow a “hawkish” approach to individuals with absences of a year or longer. It should be noted that legal permanent resident status is protected by law and must be removed by legal proceedings. The second point is where individuals can potentially incur CBP scrutiny through a prolonged periods of absence from the United States. For example, if an individual comes into the U.S. twice a year for several years to maintain their green card, questions may arise about the individual’s intent to reside in the U.S., even though that they were technically compliant. Generally speaking, if a legal permanent resident thinks they will spend more than six months outside the United States, they should talk to an immigration attorney. On May 1, 2025, CBP updated its guidance to legal permanent residents returning to the United States. This policy document states that legal permanent residents who have been out of the country for longer than six months will be subject to new immigration inspection procedures. No further details of these new and increased inspections have been released. See Traveling outside U.S. - Documents needed for Lawful Permanent Residents (LPR)/Green Card holders Certain key actions can automatically raise a question of the green card holder’s intent if they leave the United States, specifically: Clearly manifesting an intent of permanently residing in another country (i.e., applying for long-term status in that country. Green card holders must file US taxes on their global income, and they must file taxes as residents for tax purposes; failure to file resident tax returns can be seen as an intentional abandonment of status. Making statements to CBP or DHS that do not support the green card holders’ assertions that their trips abroad are temporary. Accordingly, green card holders who move abroad temporarily must be diligent in maintaining ties to the United States and take proactive steps to protect their green card. They must realize they are jeopardizing their status by extended time abroad. Returning to the United States once a year will eventually draw the ire of the CBP, and the green card holder can expect to receive progressively more intrusive and sustained questioning upon entry to the United States. Steps that green card holders who live abroad could take to protect their status include the following: Travel with evidence of why your trip outside of the US is temporary – temporary job offer, extended care for a family member, explanations for delays, etc. Continue to file US Income taxes. Maintain a residence in the US. Be diligent in not spending 365 days outside of the United States. Registering with the Selective Service is required. Updating their home address with USCIS via Form AR-11. Obtain a Re-Entry Permit:Re-Entry Permits protects a green card holder’s status for two years upon approval. Although not a guarantee of entry, the Re-Entry Permit is excellent evidence to present to CBP that the individual’s absence abroad is temporary. Re-Entry Permits can be renewed depending on the circumstances that the individual faces. Re-Entry Permits must be applied for in person in the U.S.; Having the USCIS receipt notice as evidence of the application is good evidence to demonstrate to the USCIS. Been out of the country for a year or longer?The safest route is to apply for an SB-1 immigrant visa at your local U.S. Embassy to avoid issues entering the country. Lastly, should an individual face potentially denial of entry to the United States for circumstances beyond their control, they can apply for a returning resident special immigrant visa to ensure they can enter the U.S.
May 20, 2025
Page 14 of 43
About the Blog
Receive timely content, newsletters and event information delivered to your inbox.
