Commercial Litigation
Defending Property Managers Against Expanding Debt Collection Claims in Maryland
Over the last several years, plaintiffs' lawyers have increasingly attempted to repackage routine landlord-tenant disputes as violations of Maryland consumer protection and debt collection statutes. What historically would have been lease disputes, rent collection matters, or disagreements over fees are now being asserted as claims under the Maryland Collection Agency Licensing Act ("MCALA"), the Maryland Consumer Debt Collection Act ("MCDCA"), and related consumer protection statutes. Frequently, these claims are brought as putative class actions seeking relief on behalf of thousands of current and former tenants. For property managers, owners, and multifamily housing operators, the stakes can be significant. These cases often seek not merely individual damages, but class-wide relief, disgorgement of rent, restitution, attorneys' fees, declaratory relief, and injunctions affecting ongoing business operations. As a result, the costs and disruption associated with defending such claims can be substantial, even where the underlying legal theories are ultimately unsuccessful. Why These Claims Matter The modern wave of debt collection litigation against property managers often starts with a deceptively simple premise: that because a property manager receives rent payments or communicates with tenants regarding payment obligations, it must be acting as a debt collector subject to Maryland debt collection licensing requirements. From that premise, plaintiffs frequently attempt to build far-reaching claims asserting that: A property manager operates as an unlicensed collection agency Rent accepted by the property manager must be disgorged or refunded Consumer protection statutes have been violated Lease provisions are unlawful Entire classes of tenants are entitled to restitution or statutory remedies. These theories can create enormous exposure if allowed to proceed, particularly in the class action context. Even weak claims can generate significant litigation costs through class certification proceedings, electronic discovery, expert witness expenses, and settlement pressure. For that reason, early strategic evaluation is critical. The Threshold Question: Is the Property Manager Actually Acting as a Debt Collector? In many of these cases, the central legal question is not whether rent was collected. Rather, the question is whether the challenged activity constitutes debt collection as defined by Maryland law. Property management companies perform a broad range of functions that extend far beyond collecting rent. Depending on the management arrangement, they may: Market and lease units Execute leases Manage maintenance and repairs Supervise vendors and contractors Coordinate utilities and common-area operations Handle tenant communications Manage compliance obligations Administer financial aspects of the property The mere fact that rent collection is one component of those responsibilities does not necessarily transform a property management company into a regulated collection agency. Equally important, many management companies collect rent pursuant to direct contractual authority granted in the lease itself. When a tenant agrees to pay rent directly to a property manager or a management entity acting on behalf of ownership, the legal significance of that relationship may differ substantially from the activities of a third-party debt collector whose sole function is collecting delinquent debts. These distinctions have proven critical in recent Maryland litigation. Why Early Motions to Dismiss Matter One of the most effective defense tools in these cases is a carefully crafted motion to dismiss. Too often, defendants approach these cases as if discovery is inevitable. In many instances, however, the central disputes are legal rather than factual. Questions concerning: The meaning of MCALA Whether a statutory exemption applies Whether a property manager falls within a statutory definition Whether a claim for unjust enrichment is available Whether lease provisions are lawful as a matter of law Whether a plaintiff has adequately alleged damages may be resolved at the pleading stage An early dismissal can eliminate the need for class certification proceedings, extensive document production, expensive depositions, expert testimony, and protracted litigation. In recent cases, some Maryland courts have dismissed challenges to routine property-management practices before discovery began, recognizing that statutory interpretation questions often can and should be resolved on the pleadings. Other Maryland courts have allowed these claims to proceed, thereby forcing property management companies and property owners to incur significant litigation expenses and the risk of an adverse judgment. Common Claims and Defense Themes Consumer Protection and Debt Collection Claims Many complaints rely on the assumption that collecting rent is synonymous with debt collection. A successful defense often requires careful examination of: The statutory definitions The nature of the defendant's business The relationship between the parties Any applicable exemptions Whether the challenged conduct falls within the intended scope of consumer debt collection statutes Frequently, plaintiffs focus on labels rather than conduct. Courts, however, can be persuaded to look beyond labels and examine the actual role performed by the defendant. Unjust Enrichment and Restitution Claims Another common theory seeks restitution of rent on the ground that the defendant allegedly lacked authority to collect it. Maryland law provides substantial defenses to these claims, particularly where a written lease governs the relationship, the tenancy was fully performed, the tenant received possession and use of the property, and the tenant obtained the benefit of the bargain. These principles can provide a powerful basis for dismissal at an early stage. Lease-Based Claims Plaintiffs also increasingly challenge lease provisions governing fees, notice requirements, holdover language, liability provisions, or other operational terms. Again, many of these claims present legal questions suitable for resolution through motion practice. A careful analysis of the lease language, applicable statutes, and governing case law can often narrow or eliminate these claims before substantial litigation costs are incurred. Practical Recommendations for Property Managers and Owners Although these lawsuits are often driven by aggressive legal theories, there are practical steps property managers and owners can take now, before they are sued, to reduce risk. Maintain Clear Contractual Authority Review management agreements and leases to be sure they clearly define the property manager's role and authority, including authority relating to rent collection and tenant communications. Review Collection and Communication Practices Evaluate whether rent demands, notices, and tenant communications are consistent with applicable law and internal policies. Understand Vendor Relationships Confirm whether outside vendors involved in collection activities require licensing or other regulatory approvals. Document the Basis for Charges Maintain complete records regarding rent, fees, utility allocations, and other assessments. Strong documentation can be critical when defending statutory or class-action claims and may help avoid unnecessary disputes. Engage Experienced Counsel Early The expression an ounce of prevention is worth a pound of cure applies here. Counsel familiar with these emerging debt-collection theories can help identify and address potential vulnerabilities before litigation arises. Once a lawsuit has been filed, opportunities to shape the facts and contractual framework are often limited. Early reviews of leases, management agreements, collection practices, and vendor relationships can place property managers and owners in a far stronger position if challenged later. Experience Matters in Developing Areas of Law The legal landscape surrounding rent collection and debt collection statutes continues to evolve. Several trial courts have rejected expansive theories seeking to treat routine property management activities as debt collection, while other cases continue to work their way through Maryland's courts. In developing areas of law, results frequently depend on identifying the dispositive legal issues early and presenting them in a way that allows courts to address them before litigation spirals into costly discovery and class certification battles. For property owners, managers, and housing providers, the goal is not simply to win eventually. The goal is to win efficiently, before litigation costs and business disruption overwhelm the practical value of the defense. Because Maryland courts have reached differing conclusions in some of these cases, the law remains developing. Property managers and owners should assume that these theories will continue to be tested until the appellate courts provide further guidance.
July 29, 2026
Business
Pennsylvania Supreme Court Narrows Scope of Workers’ Compensation Anti-Referral Provision: Implications in Light of Federal Physician Self-Referral Law
On June 16, 2026, the Pennsylvania Supreme Court issued a significant decision interpreting Section 306(f.1)(3)(iii) of the Workers’ Compensation Act (the “Act”), commonly known as the Anti-Referral Provision. The Court held that the placement of the phrase “goods or services” following a list of enumerated medical services does not operate as a broad catch-all prohibition on physician self-referrals. Instead, the Court concluded that the statutory prohibition is limited strictly to the specifically enumerated services that precede that phrase. As a result, physician self-referrals to pharmacies in which they hold a financial interest (e.g., ownership interest or compensation arrangement) fall outside the scope of the Act’s anti-referral restriction. Employers and insurers are therefore required to reimburse for reasonable and necessary prescriptions, even where the prescribing physician has a financial interest in the dispensing pharmacy. This ruling represents a major shift in the interpretation of Pennsylvania’s healthcare cost-containment framework and invites comparison to the federal Ethics in Physician Self-Referral Law, 42 U.S.C. § 1395nn (“Stark Law”) enacted in 1989 and later expanded in 1993. Background The case arose from multiple consolidated claims involving two (2) physicians who issued prescriptions filled by 700 Pharmacy, an entity in which they held a financial interest. When the State Workers’ Insurance Fund (“SWIF”) denied payment for those prescriptions, the pharmacy filed Medical Fee Review Applications seeking reimbursement. The applications were denied at the administrative level, when the hearing officer concluded that the prescriptions constituted unlawful self-referrals under the Act. The Commonwealth Court affirmed that determination, relying on what it viewed as the plain language of the statute. In its view, the phrase “goods or services” reflected a deliberate legislative choice intended to broadly encompass all forms of medical care, including pharmaceuticals and pharmacy services. Supreme Court Opinion The Pennsylvania Supreme Court reversed. The majority applied a textualist approach, concluding that the statutory language does not extend beyond the specific categories of medical services expressly listed in the provision. Because prescription drugs and pharmaceutical services are not included among those specified categories, the Court held that they fall outside the scope of the Anti-Referral Prohibition. In doing so, the Court rejected the argument that “goods or services” should function as a residual clause capturing all forms of medical treatment. Instead, it interpreted the statute as intentionally limited, declining to expand its reach based on broader policy considerations. Two dissenting opinions highlight the stakes of that interpretive choice. Justice McCaffery emphasized that the Anti-Referral Provision was enacted to prevent financially motivated medical decision-making and argued that the phrase “goods and services” should be read broadly to effectuate that purpose. Justice Wecht, in a separate dissent, challenged the majority’s textual analysis, suggesting that the statutory language more naturally supports a broader interpretation. Legislative Context and Comparison to Stark Law The Anti-Referral Provision was enacted as part of Pennsylvania’s workers’ compensation reform efforts in 1993 (Act 44), legislation designed to control rising system costs and curb perceived abuses. Its purpose closely parallels that of the federal Stark Law, which Congress enacted in 1989 to address the risks posed by physician self-referrals and the resulting overutilization of healthcare services. The difference lies in execution. The Stark Law is deliberately expansive, covering a wide range of “designated health services,” including outpatient drugs, and imposing strict liability for prohibited referrals unless a regulatory exception applies. It is grounded in the premise that financial incentives can distort clinical judgment and therefore must be tightly regulated. By contrast, the Pennsylvania Supreme Court’s decision reflects a narrower, text-driven interpretation of state law. Rather than extending the Anti-Referral Prohibition to align with its underlying purpose, the Court confined its application to the statute’s enumerated categories. The result is a regulatory gap: a set of financial relationships that would raise significant concerns under federal law now fall outside the scope of Pennsylvania’s workers’ compensation anti-referral framework. Practical Implications for Healthcare Providers The Court’s decision opens the door for physicians to more freely integrate ancillary services into their practices, particularly in the area of pharmacy ownership. Physicians may now prescribe medications that are filled by a pharmacy in which they have a financial interest without violating the Anti-Referral Provision. This flexibility brings with it clear financial opportunities. Providers now have the ability to capture additional revenue streams tied to prescription medications, including dispensing margins and pharmacy-related services. Given the frequency with which injured workers require ongoing medication management, particularly in chronic or complex cases, this development may have a meaningful economic impact on certain practices. At the same time, the decision does not eliminate compliance risk; rather, it shifts the focus of that risk. Providers remain subject to the Act’s cost-containment measures, including fee schedules and utilization review. Prescribing decisions must still be medically necessary and defensible, and patterns of overutilization or unusually high-cost prescribing are likely to draw scrutiny. In practice, the question is no longer simply whether a referral is permitted, but whether it can be justified. It is also critical to recognize that this ruling is limited to Pennsylvania’s workers’ compensation system and does not alter obligations under federal law. The Stark Law and the Anti-Kickback Statute continue to impose strict limitations on financial relationships tied to referrals in Medicare, Medicaid, and other federal healthcare programs. As a result, providers must take care not to conflate what is permissible in the workers’ compensation context with what is allowed elsewhere. Maintaining clear compliance boundaries between these regulatory frameworks will be essential. From a strategic standpoint, the decision is likely to prompt providers to reconsider how they structure ownership and referral relationships. Investments in pharmacies, compounding operations, and related ancillary services may become more attractive, particularly where those services can be aligned with workers’ compensation patients. The ruling effectively invites more deliberate planning around the integration of care delivery and revenue generation. At the same time, providers should expect increased scrutiny from insurers and payers. Carriers are unlikely to accept this shift passively and may respond by intensifying utilization review and monitoring prescribing patterns more closely. High-cost medications, unusual prescribing volumes, or patterns suggesting financial motivation may face heightened challenge. In that sense, while the legal restriction has narrowed, the practical oversight surrounding these arrangements may increase. Conclusion The Pennsylvania Supreme Court’s decision represents a significant narrowing of the Workers’ Compensation Act’s Anti-Referral Provision, grounded in a strict textual reading of statutory language. While the ruling is consistent with principles of statutory interpretation, it departs from the broader policy approach embodied in the federal Stark Law and from the apparent cost-containment objectives underlying Act 44 of 1993. By excluding pharmaceuticals from the anti-referral framework, the Court has created a gap between legislative intent and statutory reach. For healthcare providers, the decision presents both opportunity and risk: new flexibility in structuring business relationships, coupled with continued regulatory oversight and the possibility of future legislative correction. Whether the General Assembly will act to close that gap remains to be seen, but the decision has already reshaped the compliance landscape for provider self-referrals in Pennsylvania’s workers’ compensation system.
July 28, 2026
Labor and Employment
Three Workers' Compensation Mistakes Small Businesses with Independent Contractors Can Avoid
Many business owners assume that once they've purchased a workers' compensation policy, they've adequately managed their risk. Unfortunately, some of the most significant exposures arise not from the absence of insurance, but from misunderstandings about who is covered, whether independent contractors are properly classified, and whether coverage remains in place when an injury occurs. A workplace injury can quickly lead to disputes over worker status, insurance responsibility, and employer liability. The good news is that many of these risks are preventable. A few proactive steps can significantly reduce your company's legal and financial exposure. Don't Assume Your Independent Contractors Have Workers' Compensation Coverage Many businesses hire independent contractors with the expectation that the contractor is responsible for maintaining their own workers’ compensation insurance. That assumption can become costly. If a contractor is injured and does not maintain valid workers' compensation coverage, the hiring business may face more than a dispute over insurance obligations. In some cases, the injured worker may contend that he or she was actually an employee rather than an independent contractor. If a state’s Workers' Compensation Commission agrees, the business may become responsible for a workers' compensation claim despite having treated the individual as an independent contractor. The business may also face additional insurance premiums, audits, and scrutiny regarding worker-classification practices. Just as importantly, insurance status and worker classification are separate issues. A signed independent contractor agreement and a contractor's certificate of insurance do not necessarily determine whether the individual will be treated as an independent contractor under a state’s workers' compensation law. When evaluating workplace injuries, agencies and commissions often look beyond labels and examine the actual working relationship, including the degree of control exercised by the hiring entity. Businesses should periodically evaluate contractor relationships to ensure the classification remains defensible and consistent with day-to-day operations. Build a Process to Verify and Continuously Monitor Coverage Insurance verification should be an ongoing process, not a one-time administrative task. Many businesses obtain a certificate of insurance when a contractor is first engaged and never look at the file again. Months later, the policy may have expired without anyone noticing. Consider implementing a standard contractor onboarding and renewal process that includes: Obtaining current proof of workers' compensation coverage, including declarations pages or other documentation confirming active coverage Collecting certificates of insurance for applicable policies Recording policy effective and expiration dates Calendaring renewal dates and requesting updated documentation before policies expire Requiring contractors to notify your business if coverage is cancelled or allowed to lapse Periodically auditing contractor files to confirm documentation remains current Verifying coverage before work begins is an important first step, but it should not be the only step. Businesses should also periodically evaluate whether the contractor relationship is structured and administered in a manner consistent with independent contractor status. An expired policy creates risk, but so does a contractor relationship that may not withstand scrutiny if an injury occurs. Workers' compensation should not be reviewed in isolation. Where appropriate, contractor agreements should also require commercial general liability coverage naming your business as an additional insured. While workers' compensation policies generally do not provide additional insured status in the same manner, verifying both types of coverage helps create a more comprehensive risk-management program. Contracts Matter, Too Insurance verification works best when paired with well-drafted contractor agreements. Depending on your business and industry, contracts should address insurance requirements, require contractors to maintain coverage throughout the engagement, obligate them to provide updated proof of insurance upon renewal, require notice of any lapse or cancellation, and include appropriate indemnification provisions where legally appropriate. While strong contracts are important, they do not guarantee that a worker will be treated as an independent contractor following an injury. Courts and administrative agencies generally examine the substance of the relationship rather than the title used in the agreement. For that reason, businesses should view a contractor agreement as just one component of a broader compliance strategy. Don't Overlook Owner Coverage Elections Another frequently overlooked issue involves business owners themselves. Whether an owner is automatically covered under a workers' compensation policy, or may exclude themselves from coverage, often depends on the state law’s requirements, the company's legal structure, and the owner's role. Depending on the state, sole proprietors, corporate officers, LLC members, and partners may be treated differently. As your business grows or ownership changes, it is worth confirming that your insurance policy accurately reflects your intentions. At least annually, review: Whether owners are currently included in the policy Whether any available elections or exclusions have been properly completed Whether changes in ownership or business structure require updates to your coverage A short annual review can help prevent misunderstandings after a workplace injury. A Five-Minute Annual Compliance Check Once a year, ask yourself: Have I verified that every contractor currently maintains workers' compensation coverage Do I have current declarations pages or other proof of active coverage on file Am I tracking policy renewal dates Do my contractor agreements require continuous insurance coverage Have I confirmed appropriate commercial liability insurance and additional insured endorsements where applicable Have I reviewed whether owner coverage elections still reflect my business structure Have I evaluated whether each independent contractor relationship remains properly classified Are my managers treating contractors differently from employees in day-to-day operations Would the facts of the relationship support independent contractor status if reviewed by my state’s Workers' Compensation Commission If any answer is "no," now is the time to update your procedures. Not after someone gets hurt. In sum, workers' compensation risk management with your independent contractors is more than just collecting certificates of insurance. Businesses should verify contractor coverage, maintain current insurance documentation, periodically review worker classifications, and use carefully drafted agreements that align with actual business practices. Taking these steps can help reduce the risk of unexpected workers' compensation liability, classification disputes, insurance audits, and related litigation.
July 24, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 4: The Practical Value of Delaware Opinion Counsel
No one enjoys explaining to a client that a closing has been delayed. Yet many closing delays have little to do with negotiating business terms or obtaining financing. Instead, they stem from issues that are entirely preventable: organizational documents that were never located, governing agreements that contain unexpected approval requirements, or entity issues that surface only days before funding. These are precisely the types of issues that experienced Delaware opinion counsel can help identify before they become problems. The Opinion Letter Is the End Product, Not the Entire Service Clients often view a Delaware legal opinion as another closing deliverable. In reality, the opinion process begins long before the opinion letter is signed. Preparing a Delaware opinion requires reviewing the entity's formation documents, governing agreements, certificates from the Delaware Secretary of State, authorizing resolutions, and the transaction documents themselves. During that review, counsel frequently identifies issues that deserve attention before closing. Sometimes those issues are minor and easily resolved. Occasionally they are significant enough that addressing them early prevents a much larger problem later. In that respect, the opinion process serves as another layer of transaction diligence. Small Issues Can Become Big Delays Most transactions do not encounter major legal defects. Instead, they are slowed by relatively routine issues such as: Missing or outdated organizational documents Governing agreements requiring approvals that were overlooked Inconsistencies between the entity documents and the loan documents Administrative issues affecting an entity's status or authority Last-minute changes to transaction documents that require additional review None of these issues are unusual. The challenge occurs when discovering them the day before closing instead of several weeks earlier. Include Delaware Opinion Counsel Early One of the easiest ways to keep a transaction moving is to involve Delaware opinion counsel early. When opinion counsel is brought into the transaction after documents are substantially complete, there is generally sufficient time to review organizational records, request missing information, coordinate with transaction counsel, and resolve any questions without disrupting the closing schedule. When the opinion request arrives only a day or two before funding, even relatively minor issues can create unnecessary pressure for everyone involved. Early coordination almost always produces a smooth closing. A Collaborative Transaction Process Preparing a Delaware legal opinion is rarely done in isolation. Successful transactions require coordination among lender's counsel, borrower's counsel, local counsel, company representatives, lenders, and title companies. Clear communication allows questions to be answered early, documentation to be gathered efficiently, and expectations to remain aligned throughout the transaction. Like many aspects of commercial lending, the opinion itself is only one part of a much larger collaborative process. More Than an Opinion The best Delaware opinion engagements rarely attract attention. Documents are reviewed, issues are addressed, questions are answered, and the transaction closes on schedule. That is precisely the point. An effective opinion process reduces uncertainty, identifies issues while they are still manageable, and helps clients, lenders, and transaction counsel move confidently toward closing. When handled thoughtfully, Delaware opinion practice is not simply about producing a legal opinion. It is about helping transactions succeed.
July 23, 2026
Labor and Employment
The Hidden HR Issues Lurking in Union Labor Relations
Most labor relations playbooks focus on the visible stuff: election timelines, bargaining sessions, grievance procedures. But the issues that may actually blindside HR teams tend to be the ones nobody charts. Here are five worth a second look. Your frontline managers are the real early-warning system — and they're the least prepared Supervisors are usually the first to notice organizing chatter among employees. Their reactions in the first 48 hours often determine whether a campaign fizzles or accelerates. Yet most manager training still treats labor relations as an infrequent compliance issue rather than a live skill. A supervisor who issues a threat, a promise, or a surveillance-related comment can hand a union an unfair labor practice charge that reshapes the entire election. The fix isn't more policy, it's rehearsed, scenario-based manager readiness training before there's any sign of activity, not after. The captive audience meeting is becoming a legal minefield Thirteen states have now banned mandatory "captive audience” meetings in which company executives speak to groups of employees about the disadvantages of union organization and advantages of company policies. Even more legislation is pending, and litigation is still working through the courts. For any employer operating across state lines, this means the standard anti-organizing company speech playbook — one script, rolled out everywhere — no longer holds. HR needs a jurisdiction-by-jurisdiction approach to employee communication during organizing campaigns, which is a heavier lift than most labor relations budgets currently assume. Organizing is happening somewhere HR can't see it Social media has quietly become the default organizing channel, letting employees coordinate, compare notes, and build momentum well before any petition reaches HR's desk. By the time a campaign becomes visible internally, it may already have the signatures it needs. That shifts the real work upstream, toward genuine listening infrastructure and manager relationships, rather than reactive monitoring once cards start circulating. The NLRB Cemex decision hasn't gone anywhere Despite a more employer-friendly NLRB following recent appointments, the NLRB’s Cemex decision framework, which allows a union to immediately gain recognition via signed authorization cards and can strip an employer of its right to an election if it commits unfair labor practices during a campaign, remains in force. Employers who assume the board's new composition has quietly reset the rules are operating on outdated assumptions. Until Cemex is formally revisited, a single misstep during organizing can still mean losing the election process entirely. Grievance and arbitration data is now a data privacy problem As more states expand employee data protection statutes, the systems HR uses to store grievance files, arbitration records, and investigation notes are coming under new scrutiny. Unionized workplaces generate an unusually sensitive paper trail — medical details, disciplinary history, witness statements — and that data often sits in older case management tools never built with today's privacy requirements in mind. This is quietly becoming as much a compliance exposure as the labor relations issues the data documents. The common thread None of these issues show up on a standard labor relations checklist, and that's the point. They sit at the intersection of HR, legal, IT, and frontline management, which means they tend to fall through the cracks between departments rather than getting owned by any one of them. The employers managing labor relations well in 2026 aren't necessarily the ones with the toughest anti-union posture. They're the ones who've mapped these blind spots and assigned someone to actually watch them.
July 23, 2026
Business
Search Funds, Independent Sponsors, and CCVs: Choosing the Right ETA Model
Entrepreneurship through acquisition has moved well beyond the traditional search fund. Today, ETA buyers can pursue small business acquisitions through several different capital models, each with different implications for fundraising, governance, control, and post-close operations. For emerging searchers, search fund entrepreneurs, and acquisition-minded operators, that creates both opportunity and confusion. The same target company may attract interest from a traditional searcher, a self-funded buyer, an independent sponsor, a committed capital vehicle, a family office, or a holding company. Each buyer may describe itself as part of the ETA ecosystem. But each model raises acquisition capital differently, allocates economics differently, and creates different expectations around governance, speed, control, and post-close operations. That matters because the structure you choose does more than affect fundraising. It affects: how sellers view you how lenders underwrite you how investors control decisions how much equity you may own after closing, and whether your structure works for one acquisition or a multi-acquisition platform For most emerging searchers, the first structure does not need to solve every future problem. It needs to fit the buyer’s current stage, capital access, risk tolerance, and first acquisition strategy. That distinction matters. A buyer may eventually want to build a roll-up, raise committed capital, or create a long-duration holding company. Those goals can inform the strategy, but they should not automatically dictate the structure for acquisition number one. Overbuilding the structure too early can create unnecessary legal expense, investor complexity, governance friction, and fundraising burden before the buyer has proven the core thesis. It can also push the searcher into a model that requires capabilities the buyer has not yet developed. In many cases, the better approach is to choose the simplest structure that supports the first credible acquisition while preserving room to evolve. A searcher who has not yet operated one business usually benefits more from building the foundational operator skills than from designing a vehicle for acquisition number five. The question is not only, “Where do I want to be in five years?” It is also, “What structure gives me the best chance to close and operate the first deal well?” The ETA Market Is Becoming More Fragmented Traditional search funds remain the most recognized and studied model. They have a long track record, a familiar investor base, and a relatively standardized playbook. For many first-time searchers, they remain the cleanest path into ETA. But they are no longer the only serious option. Self-funded search has become increasingly common, particularly among buyers who want more control, more ownership, and the ability to pursue small business acquisitions using SBA financing or smaller investor syndicates. Independent sponsors have also become one of the most active buyer categories in the lower middle market M&A ecosystem, especially for experienced operators and executives with investor relationships. Family offices continue to deploy more direct capital into private companies, sometimes backing searchers and sometimes acquiring companies directly. At the same time, committed capital vehicles and long-duration holdcos have become more visible. These structures are not entirely new, but their use within the ETA ecosystem appears to be accelerating. They reflect a shift from the classic idea of buying one company toward a broader effort to build repeatable acquisition infrastructure. That is the key development. ETA is no longer a single path. It is a group of related acquisition models that sit along a spectrum between individual entrepreneurship, lower middle market M&A, family office direct investing, and institutional private equity. Traditional Search Funds The traditional search fund is still the baseline model for many emerging searchers and search fund entrepreneurs. In a traditional search fund, investors provide capital to fund the search phase. The searcher uses that capital to source, evaluate, and negotiate the acquisition of a single target company. Once a target is identified, the same investor group typically has the right to participate in the acquisition financing. After closing, the searcher usually becomes the CEO or operating leader of the acquired business. This model works particularly well for first-time buyers who want structure, mentorship, and investor support. Many traditional search investors have seen dozens of transactions and can help a searcher evaluate industries, negotiate LOIs, manage acquisition diligence, structure financing, and prepare for post-close operations. The benefit is credibility and support. The tradeoff is control. Traditional searchers usually have investors deeply involved from the beginning. Those investors may have approval rights over the acquisition, the financing, the governance structure, major post-close decisions, and the searcher’s ongoing role. That involvement can be valuable, especially for a first-time operator, but it also means the searcher is not operating independently. Economically, traditional search funds usually give the searcher meaningful upside if the acquisition closes and performs well. The searcher typically receives a salary during the search phase, then earns equity through a combination of closing, time-based vesting, and performance-based vesting. While structures vary, many traditional search economics are designed to give the searcher a meaningful minority ownership position over time rather than majority control. The model is best understood as an apprenticeship into ownership. It is often a strong fit for a searcher who wants to buy and operate one good company with investor backing, guidance, and a known playbook. It may become less efficient if the searcher’s goal is to pursue serial acquisitions, build a multi-company platform, or retain more control over long-term capital allocation. Self-Funded Search Self-funded search is different in both psychology and economics, and it has become one of the most discussed alternatives to the traditional search fund. In a self-funded search, the buyer does not raise a formal search fund at the outset. Instead, the buyer funds the search personally or with limited outside support. Once the buyer identifies a target, the buyer raises capital for that specific transaction. In many small business acquisition strategies, SBA financing plays a central role. This model appeals to buyers who want more autonomy. A self-funded searcher usually has more freedom to define the target profile, negotiate directly with the seller, select investors later, and structure the deal around the specific opportunity. The model can also allow the buyer to retain substantially more equity than a traditional searcher, particularly in smaller transactions where debt financing (usually in the form of a SBA loan) covers a large portion of the purchase price. That ownership upside is one of the main attractions. But the model also places more risk on the buyer. Self-funded searchers often pay search expenses themselves. They may sign personal guarantees, especially in SBA-financed transactions. They may have fewer institutional resources during diligence. They may also have a thinner advisory network unless they intentionally build one. The economics can be attractive, but they are less standardized. The buyer may retain a large common equity stake, raise preferred equity from a small group of investors, and personally guarantee a portion of the acquisition debt. In a successful transaction, that can create better ownership economics than a traditional search fund. In a difficult transaction, it can create greater personal exposure. Self-funded search is often well suited for smaller acquisitions, local service businesses, business services companies, light industrial businesses, trades, healthcare services, and other lower middle market companies where SBA financing and hands-on operation can support the acquisition. The model is strongest when the buyer wants to own and operate a business with meaningful personal control. It becomes harder when the buyer wants to pursue larger targets, institutional equity, multiple add-on acquisitions, or a more formal acquisition platform. Independent Sponsors The independent sponsor model sits closer to private equity than traditional search and has become an important part of the lower middle market acquisition landscape. An independent sponsor typically sources a deal first, signs or negotiates the LOI, conducts diligence, and then raises equity for that specific acquisition. Unlike a committed fund or committed capital vehicle, the independent sponsor usually does not have fully committed capital available before the transaction is identified. This model works best for people with prior operating, investing, industry, or transaction experience. The independent sponsor must persuade three groups at once: the seller, the lender, and the equity investors. The seller wants confidence the buyer can close. The lender wants confidence in the sponsor, the capital stack, and the operating plan. The investors want confidence that the sponsor found a good deal and can manage it after closing. The model provides flexibility. The sponsor can choose different investors for different deals, customize governance, structure economics around the specific acquisition, and pursue opportunities that do not fit a traditional search fund profile. But the main weakness is capital certainty. Because the sponsor often raises equity after signing the LOI, sellers and intermediaries may worry about whether the buyer can actually close. That concern becomes more significant in competitive processes or situations where the seller wants speed and certainty. Economically, independent sponsor structures often include a mix of transaction fees, direct equity, management fees, and carried interest or promote. A sponsor might receive a closing fee, a minority equity position, and a promote above a preferred return to investors. The precise terms vary widely because independent sponsor economics are negotiated deal by deal. That variability is both a strength and a weakness. It gives the sponsor flexibility, but it also means the sponsor must negotiate economics repeatedly. If the sponsor lacks a strong investor base, the economics can compress quickly. The independent sponsor model is often a strong fit for a more experienced buyer who has deal access, sector knowledge, and investor relationships, but does not yet have a committed capital vehicle or fund. Committed Capital Vehicles Committed capital vehicles, or CCVs, are becoming increasingly relevant in ETA, especially for searchers and operators who want to move from one-off acquisitions toward a repeatable acquisition platform. A CCV generally refers to a structure where investors commit acquisition capital before a specific acquisition is identified or before a series of acquisitions is completed. The vehicle may be designed to acquire one platform company, pursue multiple acquisitions, or build a long-duration holding company. The basic appeal is straightforward: capital certainty. A buyer with committed capital can often move faster than a buyer who must raise equity after signing an LOI. That matters to sellers, lenders, brokers, and investment bankers. It also matters in fragmented industries where add-on acquisitions may become part of the strategy. This is why CCVs are gaining attention among more sophisticated searchers, acquisition entrepreneurs, independent sponsors, and operators. They are not simply trying to buy one company. They are trying to create a structure that can support multiple acquisitions, longer hold periods, and more repeatable capital deployment. The economic terms of CCVs usually look more like a small private equity or holding company structure than a classic search fund. The buyer often becomes an operator-sponsor and may receive management company economics, carried interest, direct co-investment rights, transaction-related fees, or long-term incentive economics tied to the performance of the vehicle. Investors may receive a preferred return, priority distributions, approval rights over major decisions, and protections around leverage, concentration, conflicts, related-party transactions, and sponsor removal. In many CCVs, the sponsor’s upside comes primarily through carry or promote after investors receive agreed economic thresholds. The model can create meaningful upside for a sponsor who builds a durable platform. But it also increases complexity. The sponsor is no longer just a searcher or operating CEO. The sponsor becomes a capital allocator, investor relations manager, acquisition strategist, governance manager, and platform builder. That is a different job. For emerging searchers, this distinction matters. A CCV may sound attractive because it offers more capital certainty and a more scalable structure. But it also requires a more developed investment thesis, stronger investor relationships, better governance design, and a clearer plan for how capital will be deployed. A CCV is usually more appropriate when the buyer has a repeatable acquisition thesis, a credible capital partner, a reason to pursue more than one acquisition, and the experience or support needed to manage a more institutional structure. It is usually less appropriate for someone who simply wants to buy one small business and operate it directly. Long-Duration Holdcos Long-duration holdcos overlap with CCVs but are not always identical. A holdco is usually designed to own operating companies over a long period of time. Instead of buying one company with the expectation of selling it in five to seven years, the holdco may be built around long-term compounding, cash flow reinvestment, and permanent or semi-permanent ownership. This model has become increasingly attractive to investors and operators who dislike the forced exit pressure of traditional private equity. For sellers, the holdco model can also be attractive. Founder-owned businesses often care about what happens after closing. They may prefer a buyer who plans to hold the business, retain employees, preserve culture, and invest in long-term operations. Economically, holdco structures can vary substantially. Some resemble private equity funds with preferred returns and sponsor carry. Others give the sponsor direct equity in the holding company. Some include management fees or shared services fees. Others rely more heavily on long-term equity appreciation. The central economic question is how value gets allocated between the capital providers and the operator-sponsor building the platform. That question can become complicated because the sponsor may be doing several things at once: sourcing acquisitions, managing executives, building systems, allocating capital, and creating the broader platform value. Holdcos can be powerful structures when the sponsor has a long-term vision and a patient investor base. They can also become difficult if investors want liquidity sooner than expected, if governance is unclear, or if the sponsor lacks the operational infrastructure needed to manage multiple companies. Family Office Direct Acquisition Models Family offices play several roles in the ETA ecosystem and broader lower middle market M&A market. Some invest in traditional search funds. Some back self-funded searchers. Some provide equity to independent sponsors. Some anchor CCVs or holdcos. Others acquire privately held companies directly. This makes family office capital both important and hard to categorize. In direct acquisition models, a family office may use its own balance sheet or investment vehicle to acquire a privately held company. It may install an operator, partner with a searcher, back an industry executive, or manage the company through an internal team. The main advantage is patient capital. Many family offices do not face the same exit pressure as private equity funds. They may be willing to hold a business for a longer period, prioritize cash flow, and structure a transaction around seller concerns, employee continuity, and long-term stewardship. But family offices vary dramatically. Some are highly institutional, with formal investment committees, detailed diligence processes, and experienced deal teams. Others are relationship-driven, informal, and dependent on a small number of family decision-makers. That variation affects everything: speed, governance, reporting, decision-making, and post-close expectations. Economically, operators working with family offices may receive salary, bonus, direct equity, phantom equity, profit participation, or equity vesting tied to long-term performance. The terms depend heavily on whether the operator is functioning as an employee, partner, sponsor, or acquisition entrepreneur. For emerging searchers, family office backing can be valuable, but it requires clarity. The searcher should understand whether the family office expects control, what decisions require approval, how future acquisitions will be funded, how economics vest, and whether the searcher is building personal ownership or merely operating a family-owned asset. Comparing the Models The models differ less by label than by what they are built to accomplish. A traditional search fund is designed to help a searcher find, acquire, and operate one company with investor support. A self-funded search is designed to give the buyer more control and potentially more ownership, usually in a smaller transaction with more personal risk. An independent sponsor model is designed to let an experienced buyer pursue deals without a committed fund, but it requires the sponsor to raise capital transaction by transaction. A CCV is designed to provide more capital certainty and support a broader acquisition strategy. A holdco is designed for long-duration ownership and compounding across one or more operating businesses. A family office model depends on the family office itself, but often emphasizes patient capital, direct ownership, and flexibility. The right model depends on the buyer’s objective. If the goal is to buy one strong business and become CEO, a traditional search fund or self-funded search may be the better fit. If the goal is to pursue larger or more complex deals with customized capital, the independent sponsor model may fit. If the goal is to build a repeatable acquisition platform, a CCV or holdco may make more sense. If the goal is to partner with patient capital and operate over a longer horizon, family office backing may be attractive. Economic Terms Matter Because They Shape Behavior Emerging searchers often focus on headline ownership percentage. That is understandable, but incomplete. The more important question is how the economic structure shapes behavior after closing. A buyer with too little equity may lose motivation. Investors with too much control may slow decisions. A sponsor with carry but no real capital at risk may create alignment concerns. A structure with no liquidity path may create investor tension. A self-funded searcher with too much personal guarantee exposure may become overly conservative after closing. The economics are not just financial terms. They are governance terms. We've discussed the importance of negotiating a governance structure in prior editions of Search Fund Operate. These terms influence who makes decisions, who bears risk, who receives upside, and how the company responds when post-close reality differs from the acquisition model. This is why vehicle selection matters before the LOI. By the time a buyer is under LOI, the structure has already started shaping the deal. A Practical Way to Think About Model Selection For an emerging searcher, the best starting point is not the structure. It is the strategy. If you want mentorship, institutional backing, and a proven path into operating one business, traditional search remains highly relevant. If you want control, ownership concentration, and are comfortable with personal risk, self-funded search may fit. If you have deal experience and investor relationships but no committed fund, independent sponsor may be viable. If you want to pursue multiple acquisitions under a repeatable thesis, a CCV or holdco may be appropriate. If you have access to a family office that understands your operating thesis, family office backing may provide patient and flexible capital. The mistake is choosing the model because it sounds more sophisticated. The better approach is to choose the model that matches the buyer’s actual capabilities, capital relationships, risk tolerance, and acquisition plan. ETA has become more institutionalized, but the core issue remains simple. The buyer has to close the deal, operate the company, and live with the acquisition structure after closing. That is where the differences between these models become real.
July 21, 2026
Intellectual Property
How the Trademark Registration Process Actually Works — and Where Companies Get Stuck
Many companies describe the trademark registration process as slow, unpredictable, or unnecessarily complicated. While the process does take time, much of the frustration comes from misunderstanding how it works and where meaningful decisions actually occur. From an in-house counsel's perspective, the registration process is less about waiting on the USPTO and more about managing internal expectations, coordinating stakeholders and making timely business decisions. Companies that understand the process tend to move through it with far less frustration than those that assume registration is a simple administrative exercise. Understanding what happens at each stage allows legal and business teams to anticipate issues instead of reacting to them. Filing Is Only the Beginning Submitting a trademark application is an important milestone, but it is only the first step. Once an application is filed, it enters the USPTO examination queue, where it typically waits several months before an examining attorney reviews it. This waiting period often creates confusion. Business teams may assume the application is actively moving toward approval when, in reality, nothing substantive has happened yet. The delay is not unique to a particular application; it is simply how the examination system is structured. This is an excellent opportunity for in-house counsel to set expectations. Filing secures a filing date and begins the registration process, but it does not mean the government has approved the mark or even evaluated it. Managing expectations early helps prevent unnecessary status inquiries and allows the business to focus on preparing for the next meaningful stage. Examination Is the First Real Decision Point Once an examining attorney reviews the application, the USPTO determines whether the mark satisfies the legal requirements for registration. If issues are identified, the USPTO issues an Office Action explaining the concerns. These may involve: Likelihood of confusion with an existing registration Descriptiveness Identification of goods or services Specimen deficiencies Procedural issues Many applicants view an Office Action as a setback. In reality, Office Actions are a routine part of the registration process, and many applications receive one. What often delays the process is not the Office Action itself but the company's response. Legal may need input from marketing. Marketing may want to preserve branding. Business leadership may need to evaluate whether to narrow the application, adopt a consent agreement, or consider a new mark altogether. These internal discussions frequently consume far more time than preparing the legal response. The organizations that move efficiently are those that have already identified who makes these decisions before an Office Action arrives. Internal Alignment Matters More Than USPTO Timelines The USPTO controls its examination schedule, but companies control how quickly they respond. Trademark issues often require input from multiple departments: Marketing Product teams Executive leadership Outside counsel In-house legal Without clear ownership, simple decisions can remain unresolved for weeks or months. For example, if a refusal raises concerns about the scope of goods or services, someone must decide whether narrowing the application affects future business plans. If a conflict with another mark exists, leadership must determine whether coexistence, rebranding, or enforcement makes the most business sense. These are business decisions with legal implications — not merely legal questions. Organizations that establish decision-making procedures before problems arise consistently move applications forward more efficiently. Publication Is Not the Finish Line Once an application overcomes any examination issues, it is published in the USPTO's Official Gazette. Publication allows third parties to oppose registration if they believe the mark would harm their existing rights. Many applications pass through publication without incident, leading businesses to believe registration is virtually guaranteed. While that is often true, publication remains a meaningful risk period. Competitors, trademark owners, or other interested parties have an opportunity to challenge the application. If an opposition is filed, what appeared to be a straightforward registration can become a contested proceeding before the Trademark Trial and Appeal Board. For in-house counsel, publication should be viewed as another governance checkpoint. If an opposition arises, the company must evaluate the business value of the mark, litigation costs, settlement opportunities, and long-term branding objectives. The legal question is only part of the analysis. Registration Begins a New Phase Receiving a registration certificate is an important accomplishment, but it is not the end of trademark management. Trademark rights must be maintained. That includes monitoring renewal deadlines, maintaining proper use of the mark, updating ownership records when necessary, and ensuring that marketing teams use the trademark consistently. Companies should also monitor the marketplace for potentially conflicting marks. Failure to enforce rights can weaken the distinctiveness of a brand over time. As businesses grow, trademarks often become more valuable. New product lines, international expansion, acquisitions, and licensing arrangements all create additional trademark considerations. Registration establishes a foundation, but protecting brand value requires ongoing attention. Where Companies Commonly Create Delays While the USPTO's examination schedule cannot be accelerated, many delays originate inside the organization. Common causes include: Waiting too long to conduct trademark clearance Delaying difficult branding decisions Unclear ownership of legal decisions Late involvement of executive leadership Inconsistent communication between legal and marketing Assuming registration is a one-time administrative task Each individual delay may appear minor, but collectively they can add months to the overall timeline. The most successful trademark programs rely on predictable internal processes rather than last-minute decision-making. What In-House Counsel Can Control In-house counsel cannot shorten the USPTO's review queue, but they can significantly improve how the organization experiences the registration process. Setting realistic expectations from the outset helps business teams understand where delays are normal and where prompt action is required. Establishing clear decision-makers before issues arise allows Office Actions to be addressed efficiently. Developing standard procedures for trademark clearance, filing, enforcement, and maintenance reduces uncertainty and improves consistency across the organization. Perhaps most importantly, in-house counsel can help leadership view trademarks as strategic business assets rather than isolated legal filings. A well-managed trademark portfolio supports product launches, marketing investments, licensing opportunities, acquisitions, and long-term brand value. Final Thoughts The trademark registration process is rarely as unpredictable as it seems. The major milestones: filing, examination, publication, and registration, are well established, and each presents its own set of business decisions. Companies that anticipate these decision points generally experience fewer surprises and less frustration. Those that wait until each issue arises often perceive the process as slower and more burdensome than it actually is. While no one can accelerate the USPTO's timeline, organizations can improve their own by establishing clear responsibilities, aligning stakeholders early, and treating trademark management as an ongoing component of business strategy. In many cases, the biggest obstacle to registration is not the government. It is the company's own decision-making process.
July 21, 2026
Estates and Trusts
Identity, Martyrdom, and Surviving the Sandwich Generation
July is National Sandwich Generation Month. For those of us “in it”, it is a time to acknowledge the nearly 70 million of us simultaneously caring for aging parents while still raising children, supporting adult children, or both. While conversations about the Sandwich Generation often focus on the practical challenges of caregiving, finances, legal documents, and time management, there is another issue that receives far less attention: the gradual shift of identity. During my recent conversation with Jonathan Fields, host of the Good Life Project podcast, we explored something I see every day in my law practice and experience in my own life. Long before the legal documents, the estate plans, and the difficult healthcare decisions, there is a deeply personal transformation taking place. The roles that once defined us begin to shift, often without our realizing it. There emerges a realization that you are no longer simply someone's child. You have become their decision-maker. Their advocate. Their organizer. Their emergency contact. The one everyone calls when something goes wrong. And, at the very same time, your children need you in ways every bit as demanding. Younger children need your time, attention, and physical care. Indeed, our older children still need us, and often their problems become bigger, more expensive, and emotionally much more complicated. Somewhere in the middle of caring for everyone else, many begin to wonder where they went. I know I did. The identity crisis of the Sandwich Generation is rarely dramatic. It happens gradually. It is built one doctor's appointment at a time. One delayed carpool line that derailed yoga class. One PTA meeting that replaced a celebratory meeting with a client. One tension-filled conversation with your sibling that ruined date night with your spouse. One telephone call with a health insurance company about a denial leaving you $2,500 poorer than anticipated. One appointment with the lawyer talking about dying and disability. One weekend spent cleaning out a parent's home instead of brunch with your girlfriends. The accumulation of responsibility slowly crowds out the person you used to be. Many caregivers tell me they no longer recognize themselves. The career they once loved has taken a back seat. Friendships have become difficult, if not impossible, to maintain. Hobbies disappear. Vacations feel impossible. Their calendars become filled with everyone else's obligations until there is no space left for their own. Even more confounding is that our society celebrates self-sacrifice. We praise the caregiver who "does it all." We admire the proverbial selfless daughter who smiles, nods, and never complains. We applaud the parent who always puts everyone else first. What we rarely discuss is the cost of this martyrdom. The emotional exhaustion of caregiving and being everything to everyone is not a story of physical fatigue or a time-management problem to solve. Rather, it is the gradual erosion of the parts of ourselves that provide us with a sense of self-before-caregiving eclipsed our identity. As an estate planning attorney, I meet families during moments of transition. Parents are aging. Adult children are stepping into new responsibilities. Difficult conversations are happening around illness, incapacity, and mortality. While my role is to help families prepare for the legal and logistical aspects of this transition, I learned that the legal planning is the easiest part. The harder work is bearing witness to it all and helping families acknowledge that everyone involved is experiencing change. The parent is struggling with identity and the erosion of their independence, too. The adult child is struggling with a role reversal and becoming the decision-maker. Neither role feels comfortable. The result is grief in both directions. One of the most surprising aspects of the Sandwich Generation is that these identity shifts occur during what many expected would be their most rewarding years of adulthood. After decades spent building careers and raising families, many imagine they will finally have the freedom to focus on themselves. Instead, we discover that a second chapter of caregiving is just beginning. It becomes clear that the time to focus on oneself is really just an elusive goal. This is why planning matters. Planning is not just about the documents. It is about establishing clarity before the crisis. When families have conversations early, appoint decision-makers, organize important information, and communicate their wishes and expectations, they reduce unnecessary stress during already emotional moments in the future. They avoid family conflict and even fractures. Planning cannot eliminate the sadness of watching a parent age or the speed at which your children grow up. It can, however, mitigate the chaos that often accompanies it. Equally important is recognizing that preserving your own identity is not selfish. It is essential. The best caregivers are not the ones who never ask for help. They are the ones who understand that they cannot pour endlessly from an empty cup. They make space for friendships. They protect small moments that belong only to them. They allow themselves to say no without guilt. They allow themselves to grieve, and they remember that they are more than the sum of their responsibilities. The good news is that the blurred identity of those of us in the Sandwich Generation is not permanent: perhaps that is the greatest lesson of the Sandwich Generation. We are constantly becoming new versions of ourselves. We are no longer the children our parents once raised, nor are we only the parents raising our own children. We are translators and conduits between generations. We are witnesses, preserving our family stories, lore, and history. We are advocates fiercely protecting our loved ones. We are decision-makers, making difficult choices with love, respect, and compassion. These roles are important, meaningful, and sometimes all-consuming, but they do not have the power to replace the person shouldering these roles. As we recognize Sandwich Generation Month, I encourage you to ask yourself a simple question: Who am I outside of the people who need me? The answer may not be obvious. It may bloom and float to the surface after you take the time to rediscover interests that have been put on hold or dreams that have been postponed. Making space for that question is one of the most meaningful investments you can make—not just for yourself, but for the people who depend on your well-being. Because the strongest caregivers are not the ones who are relegated to the roles within the Sandwich; they are the ones who remember that they are their own selves first. Your identity is worth protecting.
July 16, 2026
Estates and Trusts
Estate Planning Essentials for Maryland’s Unmarried Couples
A shared home, shared finances, and years of mutual commitment may look indistinguishable from a legal marriage. In the eyes of the law, however, the differences can become apparent at exactly the moment when legal protections matter most. For more than a decade, marriage equality has been the law nationwide. Many couples, including those in the LGBTQ+ community, have taken advantage of the legal and financial benefits that marriage provides. Still, a significant number of couples, both gay and straight, remain happily partnered but legally unmarried. Some feel their relationships are too new; others prefer to avoid the legal and financial entanglements of marriage. For some, family dynamics, prior marriages, or personal beliefs play a role. Whatever the reason, unmarried couples do not receive the automatic legal, financial, and estate-planning protections granted to married spouses. But thoughtful planning can close much of that gap. While a set of legal documents cannot fully replicate the benefits of marriage, it can provide essential safeguards, especially in times of crisis. This planning is especially important for blended families, where one or both partners may wish to provide for both a surviving partner and children from a prior relationship. Six Key Steps to Consider Register as Domestic Partners Maryland law now allows unmarried couples to register as domestic partners with the Register of Wills. Registration can provide important legal protections that were previously unavailable to couples who chose not to tie the knot. One of the most significant benefits arises at death. If a registered domestic partner dies without a will, the surviving partner is entitled to inherit a share of the decedent’s estate under Maryland’s intestacy laws, similar to the rights of a surviving spouse. A registered domestic partner also has priority to serve as personal representative (executor) of the deceased partner’s estate. Registration provides substantial tax savings. Property left to a surviving domestic partner is exempt from Maryland’s 10% inheritance tax. This is true whether the transfer occurs under a will or trust, or through a beneficiary designation on a retirement account or “transfer on death” provision on a bank account. For couples with significant assets, this exemption alone can save thousands of dollars in taxes. Registration is available to both same-sex and opposite-sex couples and is a relatively simple process. By registering, unmarried couples can obtain many of the protections traditionally associated with marriage, including inheritance rights, exemption from Maryland inheritance tax, and greater legal recognition of their family relationships. Registration is not, however, a substitute for estate planning. Couples who register should still have wills, powers of attorney, and advance medical directives in place. Prepare Wills for Both Partners Having wills is essential for unmarried couples. Without them, state intestacy laws will apply, and those laws do not recognize unmarried partners unless they have registered under Maryland law. This means your partner could receive nothing from your estate and would have no priority to serve as your personal representative. Beyond providing for a surviving partner, a will is especially important for couples with children. A will can nominate guardians for minor children, create trusts to protect a child's inheritance, and name trustees to manage assets until children are mature enough to handle them responsibly. Without these provisions, important decisions about the care of your children and management of their inheritance may be left to the courts. A properly drafted will ensures that your partner inherits according to your wishes, can serve as your personal representative if you choose, and can administer your estate efficiently. A professionally drafted and executed will is one of the most important protections you and your partner can put in place. Consider How Assets Are Titled For unmarried couples, the way assets are titled can be just as important as having a will. Certain forms of joint ownership allow property to pass automatically to the surviving partner without probate. For example, a home owned as joint tenants with right of survivorship will generally pass directly to the surviving owner upon the death of the first partner. Likewise, joint bank accounts may allow the surviving partner immediate access to funds needed to pay household expenses and other bills. Proper asset titling can simplify estate administration, reduce delays, and provide financial security for the surviving partner during a difficult time. However, adding a partner as a joint owner is not always the right solution. In some cases, joint ownership may expose assets to a partner's creditors, create unintended tax consequences, or conflict with other estate-planning goals. Before changing title to real estate, financial accounts, or other assets, couples should consult an estate-planning attorney to ensure that ownership arrangements are consistent with their overall estate plan and financial objectives. Review and Update Beneficiary Designations Certain assets, such as life insurance policies, retirement accounts, and pay-on-death bank accounts, pass outside of your will. Instead, they transfer directly to the beneficiary designated on the account or policy, regardless of what your will may say. It is critical to review these designations periodically to ensure that they reflect your current intentions. Outdated beneficiary forms are one of the most common estate-planning mistakes and can easily undermine even a well-drafted will. Execute Durable Powers of Attorney If one partner becomes incapacitated, the other has no automatic authority to manage financial affairs. A durable power of attorney allows you to grant your partner legal authority to access financial accounts, pay bills, manage investments, handle real estate transactions, and communicate with tax authorities or government agencies. Without this document, your partner may be forced to pursue guardianship, a costly and time-consuming court process. Prepare Advance Medical Directives An advance directive enables you to appoint your partner as your health care agent in case you are ever unable to make medical decisions for yourself. This document authorizes your partner to speak with your doctors, review your medical records, and make decisions on your behalf. It also enables you to name backup decision-makers and to express your wishes regarding end-of-life care. A properly executed advance directive may be recognized in other states, making it especially important for couples who travel or relocate. Protect the Life You’ve Built Together In most cases, unmarried couples should have six key protections in place: domestic partnership registration (when appropriate), wills, proper asset titling, updated beneficiary designations, durable powers of attorney, and advance medical directives. Even couples who plan to marry in the future should consider putting these protections in place now. Legal uncertainty can arise at any time, and having these documents prepared helps ensure that both partners are protected in the interim. After marriage, the documents can be reviewed and updated to reflect the couple's new legal status and expanded rights. Whether you choose marriage or a lifelong partnership, protecting the life you have built together requires intentional planning. Consult with an experienced estate-planning attorney to help protect your relationship and your assets for the future.
July 9, 2026
Labor and Employment
No Standard, Still Liable: How OSHA Regulates Ergonomics Without an Ergonomics Rule
Ask most employers what OSHA requires on ergonomics, and you will get one of two wrong answers. Some assume there is a detailed federal rulebook governing chair height, lifting limits, and keyboard angles. Others assume that because no such rulebook exists, ergonomics is purely voluntary, a wellness perk, not a legal exposure. Both are mistaken, and the gap between them is exactly where liability lives. Musculoskeletal disorders (MSDs), otherwise known as the strains, sprains, carpal tunnel cases, and back injuries that come from repetition, force, and awkward posture, remain one of the largest single categories of workplace injury, accounting for roughly a third of serious cases and costing employers billions each year in workers’ compensation, lost productivity, and medical expenses. Yet the federal framework governing them is defined more by what is absent than by what is written down. Understanding that absence is the whole game. Ergonomics Program Standard For one decade-spanning moment, federal ergonomics regulation was real. OSHA promulgated a comprehensive Ergonomics Program Standard at the end of 2000, requiring covered employers to identify and control MSD hazards. It survived a matter of weeks. In early 2001, Congress invoked the Congressional Review Act and passed a joint resolution rescinding the rule, which the President signed. The CRA repeal did more than erase the standard. By its terms, the Act bars an agency from reissuing a rule in “substantially the same form” without fresh congressional authorization. That single procedural feature is why, a quarter-century later, there is still no federal ergonomics standard — and why one is unlikely to appear through ordinary rulemaking. OSHA did not decline to regulate ergonomics. It was statutorily disarmed from doing so the conventional way. The General Duty Clause What is left in OSHA’s arsenal is Section 5(a)(1) of the OSH Act, the General Duty Clause, which requires every employer to furnish a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” The clause is OSHA’s catch-all: it reaches recognized, serious hazards for which no specific standard exists. Ergonomics is the textbook example, sharing that territory with heat illness, workplace violence, and combustible dust. For a labor and employment audience, the operative point is that a General Duty Clause citation is not a free-floating accusation that a workplace felt unsafe. OSHA must establish four elements: A condition or activity in the workplace presented a hazard to employees The employer or its industry recognized that hazard The hazard was causing, or was likely to cause, death or serious physical harm A feasible and useful means existed to materially reduce the hazard Each element is a defense opportunity, and the second and fourth are where ergonomics cases are usually won or lost. “Recognition” can be proven through the employer’s own injury logs, prior complaints, internal ergonomics assessments, or industry consensus materials and NIOSH guidance. “Feasibility” turns on whether a workable engineering or administrative control (i.e., job rotation, lift assists, workstation redesign, or pacing changes) actually existed and was reasonably available. An employer that can show it identified its risks and was implementing reasonable controls in good faith is in a fundamentally different posture than one that did nothing. The Quieter Enforcement Levers The General Duty Clause is the headline mechanism, but it is not the only one, and it is important not to overlook the supporting cast. Recordkeeping obligations under 29 C.F.R. Part 1904 require accurate logging of work-related MSDs. A failure to record can be an independent citation, and an inaccurate log undercuts the credibility of every other defense an employer might raise. The hazard alert letter deserves particular attention because of how it compounds. When OSHA observes ergonomic risk that it is not prepared to cite outright, it may issue a hazard alert letter — a "no-impact" document carrying no fine and no immediate citation history. It is tempting to file and forget. That is a trap. If the agency returns and finds the flagged hazards unaddressed, the prior letter supplies the knowledge element that can elevate a later citation to willful. There is no formal mechanism to contest the letter’s findings, so the practical response is to treat it as a litigation exhibit in waiting: conduct a documented assessment, implement corrective action, and preserve proof of both. What Is Actually Changing in 2025–2026 Two developments make this an unusually live area rather than a settled one. First, in July 2025, OSHA proposed narrowing its own General Duty Clause interpretation, carving out hazards that are “inherent and inseparable from the core nature of a professional activity or performance” —aimed at inherently risky pursuits like certain entertainment and athletic work. The comment period drew enough interest that OSHA extended it and scheduled a public hearing. For ergonomics specifically, the early read from the defense bar is that this changes little: the MSD hazards in warehousing, healthcare, meatpacking, and manufacturing are not “inherent and inseparable” from the core work in the way the proposal contemplates, so robust General Duty Clause enforcement in those sectors is expected to continue. Still, the proposal signals a broader judicial and administrative skepticism toward expansive use of catch-all clauses — a theme worth tracking in any 5(a)(1) defense. Second, and more consequential, the states are filling the federal vacuum. Roughly five states now maintain ergonomics standards of some form, including California, Oregon, Washington, Michigan, and Minnesota, and the recent activity is concentrated in the last two. Minnesota's statute (Minn. Stat. § 182.677) is the one to know. Effective January 1, 2024, it requires covered employers in three high-MSD sectors (warehouse distribution centers, meatpacking and poultry processing sites, and licensed health care facilities), each above defined headcount thresholds, to maintain a written ergonomics program with risk assessments, training, and early-reporting procedures. It layers on a five-year first-aid log requirement and ties enforcement into the state's existing AWAIR safety-program framework, with safety committee obligations triggered above certain incidence rates. This is precisely the kind of prescriptive, documentation-driven mandate the repealed federal rule once contemplated, now operating at the state level. Washington is moving more incrementally but deliberately. Its Department of Labor & Industries regained authority to issue ergonomics rules and may promulgate one rule per year, targeting industries whose workers’ compensation MSD claim rates run at more than twice the statewide average, with effective dates from mid-2026 onward. Multi-state employers can no longer assume a single national compliance posture; the obligations now vary materially by where the work is performed. Enforcement at the federal level, meanwhile, has not gone dormant. OSHA’s high-profile resolution with Amazon, which included committing to facility-wide ergonomic abatement including adjustable workstations, anti-fatigue flooring, and job rotation, demonstrated the agency’s willingness to pursue ergonomic hazards against even the largest employers through the General Duty Clause, and effectively set a reference point for what “feasible controls” look like in high-throughput logistics. The Practical Takeaway The recurring misconception is that “no standard” means “no duty.” It never did. The combination of an active General Duty Clause, recordkeeping obligations, hazard alert letters that ripen into willful-violation predicates, and a growing patchwork of state mandates produces a real and enforceable framework, just one assembled from parts rather than handed down as a single rule. For employers, the defensive posture writes itself: identify ergonomic risks proactively, prefer engineering and administrative controls over PPE, document assessments and corrective action contemporaneously, and respond to hazard alert letters as if they were citations-in-waiting. Good-faith, documented effort is not merely good safety practice: under the four-element test, it is the difference between a defensible record and a willful citation. The federal government may not have written the ergonomics rulebook. But it has built, piece by piece, a regime that holds employers to one all the same.
July 9, 2026
Family Law
Saying “I Do” Without Saying Goodbye to Family Wealth
For high‑net‑worth individuals, trusts and family wealth structures are often central to long‑term financial planning. A common question in divorce is whether these assets can be protected from equitable distribution, particularly when a prenuptial agreement (“prenup”) is in place. The answer is nuanced and depends on several interrelated factors, including how the trust is structured, how it is used during the marriage, and the strength of the prenup itself. A well-drafted prenuptial agreement is one of the most effective tools for shielding trust assets from division. Prenups can clearly define: 1) what constitutes separate vs. marital property, 2) how trust interests are treated, and 3) whether income or distributions from a trust remain separate or become marital. If the agreement explicitly identifies trust assets, and any appreciation or income derived from them, as separate property, courts are often inclined to enforce those provisions, provided the prenup is valid (i.e., entered into voluntarily, with full disclosure, and without unconscionability). However, a prenup is not absolute. Courts may scrutinize it carefully, especially in long-term marriages or where enforcement would produce a significantly unfair outcome. Even with a prenup, courts look beyond the document to how the trust functions in practice. Discretionary trusts (where distributions are controlled by a trustee) are more likely to remain protected because the beneficiary spouse does not have a guaranteed right to the assets. Mandatory or vested interests (where the beneficiary has a clear right to receive income or principal) are more vulnerable to being considered marital property. If a spouse has significant control over the trust, such as serving as trustee or having the power to direct distributions, courts may view the trust as a personal asset rather than a protected structure. Even protected assets can lose their separate character if they are commingled with marital property. Examples include: Using trust distributions to fund joint accounts or marital expenses Retitling assets into joint names Relying on trust funds to support the marital lifestyle A prenup can mitigate this risk by specifying that commingling does not convert separate property into marital property, but courts may still examine the facts closely. If trust income is regularly used to support the couple’s lifestyle, a court may consider that income, if not the principal, when determining: spousal support (alimony), child support, overall fairness in property division. Even when a prenup successfully shields trust principal from division, there are important limitations: Support Obligations: Courts may still consider trust income or access to funds when setting alimony or child support. Public Policy Considerations: A court may refuse to enforce provisions that would leave one spouse in extreme financial hardship. Validity Challenges: Prenups can be challenged on grounds such as insufficient disclosure or coercion. To increase the likelihood that trusts and family wealth structures will be shielded: Draft a detailed prenuptial agreement that clearly addresses trust assets, income, and appreciation Maintain strict separation between trust assets and marital property Avoid excessive control over trusts where possible (e.g., consider independent trustees) Document intent and usage of trust distributions carefully Coordinate estate planning and family law strategy, ensuring consistency between trust documents and the prenup A prenuptial agreement can significantly enhance the protection of trusts and family wealth structures in the event of divorce, but it is not a guarantee. Courts look at both the legal framework and the real-world handling of assets during the marriage. For wealthy individuals, the most effective strategy is a combination of careful drafting, disciplined asset management, and aligned legal planning across trust and marital agreements.
July 8, 2026
Landlord Representation
HUD’s Assistance Animal Reset: Where is Federal Enforcement Heading?
If there is one fair housing topic that has generated a disproportionate amount of litigation, complaints, training questions, and frustration over the past decade, it is assistance animals. For years, housing providers operated under HUD guidance that recognized both trained service animals and untrained emotional support animals (ESAs) as qualifying for reasonable accommodation under the Fair Housing Act (FHA). However, that framework has now been disrupted. HUD's May 22, 2026, enforcement memorandum represents the most significant federal policy shift on assistance animals in a decade. But perhaps even more importantly, it signals where HUD appears to be headed next. Looking Back: HUD’s Trajectory Before May 2026 To understand the significance of HUD's recent actions, it is helpful to review the prior trajectory. In 2013, HUD issued guidance clarifying that untrained assistance animals (specifically, ESAs) should be treated as reasonable accommodations under the Fair Housing Act, even though ESAs were not recognized under the Americans with Disabilities Act (ADA). In 2020, HUD issued detailed guidance on how to evaluate assistance animal requests. This guidance became the primary resource used by housing providers, disability advocates, attorneys, and fair housing investigators. That guidance expressly recognized that assistance animals were not limited to trained service animals and could include emotional support animals that provided therapeutic benefit to a person with a disability. In direct response to HUD’s guidance, housing providers revised policies, created accommodation procedures, waived animal fees, and trained staff based on HUD’s framework. By 2024, the prevalence of quick and cheap online certifications for animals to be considered ESAs exploded. Fraud and misuse escalated, and it became increasingly difficult to verify the authenticity of a resident’s request for a reasonable accommodation to allow an ESA, which created ambiguity for both landlords and tenants. Then, in September 2025, HUD abruptly rescinded its prior 2013 and 2020 guidance documents. While the agency did not replace those materials with a new substantive framework, the rescission served as an early indicator that HUD was reconsidering its position on assistance animals and the applicability of ESA-related accommodations. HUD’s New 2026 Enforcement Standard In May 2026, HUD's Office of Fair Housing and Equal Opportunity (FHEO) announced that it would immediately change how it investigates and prosecutes animal-related accommodation complaints. According to the new memorandum, HUD will pursue FHA enforcement actions only when the animal has been “individually trained to perform work or perform tasks directly related to the complainant’s disability.” HUD explicitly adopted the ADA analysis that the assistance animal must be a trained service animal; however, HUD clarified that, unlike the ADA, the animal need not necessarily be a dog. In a shocking overhaul of prior guidance, HUD indicated that it is unreasonable to require a housing provider to waive pet policies for an untrained ESA. Source: AS-Trainor-Enforcement-Guidance-Assessing-Requests-for-the-use-of-an-animal-as-a-reasonable-accommodation-under-the-fair-housing-act.pdf This is not a reinterpretation of past guidance. It is a substantial policy shift that narrows the scope of consideration when an animal-related reasonable accommodation request is received. Indeed, the agency expressly stated that comfort, companionship, emotional support, and similar therapeutic benefits do not constitute disability-related work or tasks. This shift means that untrained emotional support animals no longer fall within HUD’s enforcement priorities. Source: AS-Trainor-Enforcement-Guidance-Assessing-Requests-for-the-use-of-an-animal-as-a-reasonable-accommodation-under-the-fair-housing-act.pdf Looking Ahead: What HUD Appears Likely to Do Next The May 2026 memorandum may ultimately be remembered not for what it did immediately, but for what it foreshadowed. HUD has publicly announced its intention to engage in formal notice-and-comment rulemaking regarding assistance animals under the Fair Housing Act. The agency specifically indicated that it is considering regulatory changes that would align the FHA assistance-animal framework with the ADA’s service-animal model. If HUD follows through, the rulemaking process would represent the first significant regulatory overhaul of these standards in decades. While predicting agency action is always risky, HUD’s direction appears clear. This administration has repeatedly emphasized concerns regarding fraudulent ESA documentation, inconsistent standards, and the growing number of fair housing complaints involving emotional support animals. FHEO made a point of appending to its memo two examples of no reasonable cause determinations issued in April 2026 for complaints involving untrained ESAs. Whether the proposed regulation survives public comment, litigation challenges, and eventual judicial review remains to be seen. What About DOJ? Housing providers should be cautious about assuming that the Department of Justice (DOJ) will immediately mirror HUD's new position. Historically, DOJ has continued pursuing FHA disability-discrimination cases involving assistance animals and accommodation requests. In August 2024, DOJ entered a significant settlement involving allegations that a cooperative housing provider refused to accommodate a resident's emotional support animals and retaliated after she sought assistance. The resulting consent decree included substantial monetary relief and ongoing compliance obligations. Source: Southern District of New York | U.S. Attorney’s Office Obtains Settlement Of Fair Housing Act Case Compensating Discrimination Victim Threatened With Eviction For Maintaining Support Animals | United States Department of Justice More broadly, DOJ continues to emphasize accommodations for ESAs in housing and pursue disability-discrimination enforcement cases (including those involving ESAs). Although DOJ may eventually align more closely with HUD's regulatory direction, we have not yet seen any comprehensive DOJ announcement signaling a wholesale abandonment of ESA-related FHA enforcement. A Local and Regional Focus Matters More Than Ever HUD's enforcement priorities, guidance, and interpretation of the regulation have changed. However, the Fair Housing Act itself has not changed. Congress has not amended the statute, and HUD has not yet completed the formal rulemaking process required to create binding regulations. Complainants remain able to bring private lawsuits, and courts across the country remain free to interpret the FHA differently. In other words, reduced HUD enforcement risk does not necessarily mean reduced litigation risk. The greatest mistake a housing provider can make right now is adopting a nationwide policy based solely on HUD's memorandum. Many state and local fair housing laws contain stricter disability protections than federal law. State agencies, local human rights commissions, and fair housing organizations are not bound by HUD's internal memorandum and may continue pursuing ESA-related claims. This means a policy that presents relatively little risk in one jurisdiction could create substantial exposure in another. For multifamily operators, developers, and housing providers, the best approach is to analyze assistance-animal requests through both a federal and local-law lens and on a case-by-case basis. HUD has made its position increasingly clear. The agency appears committed to aligning FHA assistance-animal standards with the ADA's trained-service-animal model. But until rulemaking is complete and courts weigh in, housing providers should focus less on what HUD hopes the law will become and more on what the law requires today in the jurisdictions where they operate.
July 7, 2026
Family Law
When One Parent Refuses: Getting a Child’s Passport for Summer Travel
Planning international travel with your child can quickly become complicated if your ex-partner refuses to consent to a passport. Under U.S. law, children under 16 generally need both parents’ permission to obtain a passport. Without it, the application is typically denied. What Happens When a Divorced Parent Says No? If parents share joint legal custody, one parent cannot usually get their child a passport. Both parents must consent, however, when disagreements arise, the issue often requires court intervention. A parent seeking travel can file a motion asking the court to: allow the passport application without the other parent’s consent, require the other parent to sign, and/or approve specific travel plans. How Courts Decide Judges focus on the child’s best interests, considering factors like: The purpose and length of the trip The destination and safety concerns Whether travel interferes with the other parent’s time Risk the child may not return Whether reasonable details and safeguards are in place If the trip is well-planned and low-risk, courts often allow it. Courts may order the non-consenting parent to cooperate or permit the passport application without them. The court may also require travel details in advance or adjust parenting time to compensate the other parent. Planning Ahead These disputes can take time to resolve, so early planning is critical. Providing detailed information and attempting to work things out before going to court can sometimes avoid litigation altogether. While one parent’s refusal can delay travel, it doesn’t always stop it. Courts have the authority to step in and allow a passport when international travel is appropriate and in the child’s best interests.
July 7, 2026
Labor and Employment
Virginia’s Non-Compete Restrictions Are Now in Effect: What Employers Need to Do Now
Virginia Governor Abigail Spanberger signed Senate Bill 170 on April 13, 2026. In the weeks that followed, however, Virginia’s non-compete landscape shifted even further. On May 14, 2026, Governor Spanberger also signed SB 128, which expands restrictions on non-competes by prohibiting such agreements altogether for healthcare professionals. Both laws took effect on July 1, 2026. What initially appeared to be a targeted modification to enforceability now operates as a broader restructuring of how non-competes function in Virginia. Non-Competes Are Now Conditional Under SB 170, a non-compete is unenforceable if an employer terminates an employee without cause unless the employer provides severance or other monetary consideration that was disclosed at the time the agreement was executed. Notably, the statute does not define “cause” or establish a minimum severance amount. The legislation expands upon Virginia’s existing restrictions on non-competes for low-wage and non-exempt employees. The statute applies broadly to all employers and reflects a continued state-led shift away from treating non-competes as baseline protections for employers. Instead, Virginia employers must plan, price, and document non-competes at the outset of the employment relationship. In practice, employers must determine at the time of hire whether a particular role justifies a post-employment restriction and whether they are prepared to commit financially to preserving that restriction in the event of a no-cause separation. If that determination is not made and documented from the beginning, the restriction may be unenforceable. Termination Decisions Now Control Enforceability One of the most consequential effects of SB 170 is that enforceability is no longer determined solely by the language of an agreement. It is now directly tied to how the employment relationship ends. A without-cause termination without the required pre-disclosed payment will render a non-compete unenforceable. A for-cause termination, by contrast, may preserve enforceability, but it also creates the potential for disputes over whether the termination was properly classified as for cause. This creates a direct connection between contractual terms, defined standards for “cause,” and actual termination practices. As a result, even carefully drafted agreements may fail if operational decisions are not aligned with the terms of the restriction. Healthcare Non-Competes Are Also Eliminated At the same time, SB 128 imposes a near-total prohibition on non-competes for healthcare professionals, broadly defined as “any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.” Employers who violate this prohibition may face civil penalties, fee exposure, and private enforcement risk. While confidentiality agreements and limited non-solicitation provisions remain available, non-competes are no longer a viable tool in this sector. This development reflects a broader willingness to restrict non-competes not only by circumstance, but by industry. A Broader Shift Toward Data Protection These developments build on a broader trend: courts and legislatures are placing less emphasis on where employees work and greater emphasis on whether employers are meaningfully protecting legitimate business interests. Virginia’s framework reflects that shift. While it limits and conditions non-competes, it leaves intact protections for confidential information and trade secrets, making information access, use, and safeguarding the primary battleground. Employers that rely solely on restrictive covenants, without corresponding data protection efforts, may find those agreements increasingly insufficient. Bottom Line Non-competes in Virginia remain viable, but they are no longer passive protections. They must be deliberate, supported, and aligned with business decisions from hiring through separation. At the same time, SB 170 and SB 128 shift the focus toward information governance and fundamentally change how non-competes operate in practice. Employers that pair narrowly tailored agreements with strong data protection practices will remain well-positioned. Those that do not risk discovering that their protections are unenforceable.
July 6, 2026
Mergers and Acquisitions
Breaking Down Rollover Equity: Why Buyers Love It and What Sellers Need to Know
For many business owners, the goal of selling their company is turning their years, and often decades, of hard work into liquidity. But in some cases, retaining a stake in the company could prove to be fruitful for both the buyer and the seller. That is where rollover equity comes into play. Below is a breakdown of the benefits and risks of rollover equity, and what sellers need to know. Rollover Equity Explained The concept of rollover equity is simple. Instead of paying a seller entirely in cash, a buyer acquires 100% of the target company while allowing founders and key shareholders to retain a stake in the new ownership structure. The seller still receives some immediate liquidity at closing, exchanging the remaining portion for equity in the post-transaction business. This is certainly not a new concept and has been common in private equity transactions for some time. However, it is becoming an increasingly important tool today as buyers and sellers work to bridge valuation gaps and align their incentives in today’s more cautious deal environment. The Benefits of Rollover Equity One of the most obvious benefits of this deal structure is that it reduces the amount of cash required to close a transaction. This is a significant benefit for buyers who are motivated to preserve capital whenever possible, particularly in today’s market when financing costs are elevated, and lenders are scrutinizing leverage more carefully. Buyers do not have to fully fund a transaction with cash, but they still obtain full control of the entire company. Additionally, when founders remain involved, there is an increased confidence that the management team and employees will remain motivated and stay onboard. Continued seller participation can also help to preserve relationships, maintain operational continuity, and retain institutional knowledge after the deal closes. These non-economic factors can be critical to the company’s future success. Rollover equity can also be a tool to bridge valuation disagreements between a buyer and seller. A frequent issue that arises is a seller’s belief their business deserves a higher valuation based on its growth potential vs. the buyer’s hesitation to fully underwrite those projections in cash. A rollover structure provides a bridge for both sides to move forward despite the disconnect on valuation. The seller gets to walk away with immediate liquidity while still retaining the opportunity to benefit from the upside if the company continues to grow. That second bite at the apple can prove to be extremely valuable for a seller if the company later sells at a higher valuation. They can see returns that far exceed anything they would have generated from an all-cash transaction up front. This makes rollover equity particularly attractive for sophisticated sellers who see the opportunity to continue participating in value creation alongside the buyer. The Risks of Rollover Equity While there are many upsides to rollover equity, it is not without risk. Most importantly, sellers must fully understand what they are receiving in exchange for the portion of the sale they are not receiving in cash. The rolled equity is typically a minority stake in a buyer-controlled entity. The seller will have minimal control over future decisions, including exit timing. Therefore, the rights associated with the rollover are incredibly important and should be carefully negotiated. Rollover equity can also include some restrictions for the seller. For example, there can be mandatory hold periods, drag-along provisions, or other limitations that can affect how and when the seller can monetize their investment. The capital structure of the post-closing entity also matters. If the new entity is highly leveraged, the seller may face a very different set of risks than they did as the original owner. As with any transaction structure, a rollover transaction comes with its own set of tax considerations as well. When structured properly, rollover equity can come with the added benefit of tax deferral in certain instances for sellers, but the rules here are complex and highly dependent on deal structure. It is essential to bring in legal and tax counsel early on to ensure everything is structured appropriately and aligns with the seller’s financial goals. Rollover equity can be a highly beneficial tool for both buyers and sellers, and it will no doubt continue to be increasingly used in today’s M&A environment. But there are many considerations, especially on the sell side, that must be addressed from the start. Working with effective legal counsel throughout the process can help to reduce the risk, increase the benefits, and set up sellers for even greater success in the future.
July 6, 2026
Labor and Employment
Three Jurisdictions, Three Timelines: What the DMV’s Shifting Leave Laws Mean for Employers
For years, employers in the Washington metropolitan area could treat paid family and medical leave as a “somewhere else” problem, an issue for companies with workforces in California, New York, or New Jersey. That era is over. As of this spring, an employer with even a handful of employees spread across Maryland, Virginia, and the District of Columbia is now managing three separate leave regimes, each built on a different funding model, each carrying different obligations, and, perhaps most challenging of all, each operating on its own clock. The result is a compliance puzzle that a single, one-size-fits-all leave policy simply cannot solve. Below is a snapshot of where each jurisdiction stands and what the calendar looks like heading into 2027 and 2028. Washington, D.C. The Established Program You Cannot Put on Autopilot Of the three jurisdictions, the District's program is the most mature, and, for that reason, the one employers are most likely to take for granted. D.C.’s Paid Family Leave program has been paying benefits since 2020 and is administered by the Office of Paid Family Leave within the Department of Employment Services. A few features distinguish it from its neighbors. First, D.C.’s program is funded entirely by employers; there is no employee payroll deduction. The current contribution rate is 0.75% of each covered employee’s gross wages, remitted quarterly through the Employer Self-Service Portal, with payments due at the end of the month following each quarter (April 30, July 31, October 31, and January 31). Second, eligible employees can access up to 12 weeks each of family, medical, and parental leave, plus two weeks of prenatal leave, with partial wage replacement up to a weekly maximum that the District adjusts periodically. The compliance trap here is complacency. The contribution rate has changed more than once in recent years, the maximum weekly benefit is adjusted over time, and the D.C. PFL statute itself does not provide job protection, that has to be layered in through the D.C. and federal FMLA. Employers who set up their payroll years ago and stopped paying attention are the ones most likely to be out of step. Ongoing obligations still require ongoing attention: timely quarterly filings, current rate application, and the required employee notice. Maryland A Long-Delayed Launch That Is Finally on the Horizon Maryland’s Family and Medical Leave Insurance (FAMLI) program has been a moving target in the region. Enacted in 2022, its implementation dates have been repeatedly pushed back; most recently, in response to federal actions affecting the timeline. For employers who tuned out during the delays, now is the moment to tune back in, because the runway is getting short and the final regulations took effect March 30, 2026. Here is the current timeline that matters: Fall 2026: Employer registration opens. Any employer with at least one employee in Maryland will be required to register (there are no exceptions) and will need to designate an Authorized Officer and decide between the State Plan and an approved private plan. January 1, 2027: Payroll contributions begin. The total contribution rate is 0.9% of covered wages, split evenly between employer and employee (0.45% each). Small employers with fewer than 15 employees are exempt from the employer share, but their employees still contribute. January 3, 2028: Benefits become available. Eligible employees (generally those who have worked at least 680 hours in Maryland over the prior four quarters) can receive up to 12 weeks of paid leave (with the possibility of an additional 12 weeks for parental bonding in certain circumstances), capped at $1,000 per week. The practical takeaway for Maryland employers is that the meaningful work happens well before benefits ever get paid. Registration this fall, payroll-system readiness for the January 2027 contribution start, the State-Plan-versus-private-plan decision, and employee notices all land in the next several months (and not in 2028). Virginia The Newcomer That Changes the Regional Calculus The biggest development of 2026 came out of Richmond. In April, Virginia became the first state in the South to enact a statewide paid family and medical leave program, and it paired that with a significant expansion of paid sick leave. Employers who have long viewed Virginia as the “light touch” jurisdiction in the region will need to recalibrate. Paid Family and Medical Leave. Administered by the Virginia Employment Commission, the PFML program will begin collecting payroll contributions on April 1, 2028, and will begin paying benefits on December 1, 2028. When it takes effect, eligible employees may receive up to 12 weeks of leave per year with wage replacement of 80% of average weekly wages, subject to a cap tied to the statewide average weekly wage (roughly $1,500 per week under current figures, adjusted annually). Contributions are shared between employers and employees; employers with 11 or more employees must remit both portions (deducting up to half from employees), while employers with 10 or fewer are not required to pay the employer share. The program includes job-protection and benefit-continuation rights for employees who have been on the job at least 120 days, and it offers a private-plan alternative for employers who prefer to self-administer. Contribution rates have not yet been set—the VEC must finalize regulations and rates before the program launches—so the exact cost remains to be seen, though early estimates put it under 1% of wages. Paid Sick Leave—and this one comes sooner. Just as important for planning purposes, Virginia’s new paid sick leave mandate takes effect July 1, 2027. It expands the state's existing sick-leave requirement (which previously reached only certain home health workers) to nearly all private-sector employees and state and local government employees. Employees will accrue at least one hour of paid sick leave for every 30 hours worked, and the law expressly covers “safe leave” for employees dealing with domestic violence, sexual assault, or stalking. Notably, the enforcement provisions have teeth: aggrieved employees may recover double the amount of any unpaid sick leave plus actual damages, and the law prohibits retaliation. Because the sick-leave obligation arrives in mid-2027 (well before the PFML program goes live), Virginia employers effectively have two distinct deadlines to manage, not one. Why the Differences Are the Whole Point It would be convenient if these three programs converged. They do not. Consider just a few of the fault lines a multi-jurisdiction employer has to navigate: Who pays. D.C. is employer-funded only. Maryland and Virginia split contributions between employer and employee, but with different rates, different small-employer carve-outs (fewer than 15 in Maryland, 10 or fewer in Virginia), and different wage caps. Job protection. Maryland and Virginia build reinstatement rights into their statutes. D.C.'s PFL does not, leaving job protection to the FMLA framework. Timing. An employer running payroll across all three is looking at ongoing quarterly obligations in D.C. right now, Maryland contributions starting January 2027, Virginia sick leave in July 2027, and Virginia PFML contributions in April 2028. State plan versus private plan. Both Maryland and Virginia allow approved private plans as an alternative to the state program. That decision, which carries cost, administrative, and renewal implications, needs to be made deliberately, not by default. Layered on top of all this is the coordination problem: each of these programs interacts with the federal FMLA, with existing employer PTO and short-term disability policies, and with one another. Getting the concurrency and stacking rules wrong is where liability tends to accrue. What Employers Should Be Doing Now The through-line across all three jurisdictions is that the compliance work front-loads. Waiting until benefits start paying is waiting too long. In the coming months, employers with a regional footprint should be inventorying which employees fall under which program, confirming payroll readiness for the Maryland and Virginia contribution start dates, evaluating private-plan options, updating handbooks and leave policies to reflect the new entitlements, preparing the required employee notices, and training HR and managers on the accrual, coordination, and anti-retaliation rules.
July 6, 2026
Estates and Trusts
Using Charitable Remainder Trusts to Reduce Income Tax Inefficiency in Retirement Accounts and Give More
The Federal estate and gift tax exemption is at a historically high level. In 2026, only individuals who make taxable gifts during their lifetime, combined with assets that pass through their estate, in excess of $15 million, will be liable for any tax. As such, much of the focus of estate planning has shifted from reducing estate tax liability towards creditor protection and succession planning. However, many individuals with significantly less than $15 million in assets may still leave their beneficiaries with significant tax liability if their assets are held in qualified accounts, such as individual retirement accounts (IRAs) and 401(k) plans. Trillions of dollars are currently accumulated within these tax-advantaged qualified retirement accounts. For many families, their IRA or 401(k) represents their most significant appreciated assets. Retirement Accounts do not receive a “Step-Up” in Basis Most appreciated assets receive a "step-up” in capital tax basis at the owner’s death. The “step-up” means that the decedent’s heirs inherit these assets with a capital gains tax basis reset to the fair market value as of the date of the decedent’s death. For example, if an individual acquires a stock at $100 and later sells it for $1,000, the individual is liable for capital gains tax on the appreciation in the stock. However, if the individual dies owning the stock and his heirs sell it immediately, there will be zero capital gains tax liability. This step-up can effectively wipe out thousands of dollars in capital gains tax liability. Unfortunately, IRAs and 401(k)s are an exception to this rule. They do not receive a “step-up” basis. Instead, every single dollar of appreciation in these assets, once distributed from an inherited IRA to an individual beneficiary, is taxed as ordinary income at the beneficiary’s income tax bracket. Before the enactment of the SECURE Act, beneficiaries of inherited IRAs were permitted to "stretch” these taxable distributions over their lifetime by taking required minimum distributions (RMDs) based on their life expectancy. A beneficiary younger than the original account owner would have much smaller RMDs, allowing inherited IRA assets to appreciate over a long period of time, income tax-deferred. This strategy reduced or eliminated the “income tax bracket creep” that may occur when significant distributions are made from the inherited IRA that would push the beneficiary into a higher income tax bracket and increase the amount of the income taxes that were ultimately paid. The SECURE Act largely eliminated this strategy. Under current law, most non-spousal beneficiaries must liquidate their inherited IRA within ten years of the death of the original account holder. This is commonly referred to as the “ten-year rule.” The compressed time frame reduces the time that the assets within the inherited IRA can continue to grow without the tax drag. It makes it much more likely that the distributions will push the beneficiary into a higher tax bracket. To make matters worse, most beneficiaries of qualified accounts will be in their peak earning years. Distributions from a modest one-million-dollar inherited IRA will be reduced by hundreds of thousands of dollars after the payment of federal and state income taxes. Using a Charitable Remainder Trust to Restore Tax Efficiency Fortunately, there is a solution to replicate the “stretch” and reduce this income tax inefficiency. The account holder can name a charitable remainder trust (CRT) as the designated beneficiary of the IRA. The CRT can be established during the account holder’s lifetime or may be designated under the account holder’s will or revocable trust (a “testamentary CRT”). A CRT is a split-interest, tax-exempt vehicle. One or more income beneficiaries receive an annual payment for a set term of years (a “CRAT”), or an amount based on a percentage of the trust at the end of the year (a “CRUT”). At the end of the term, which could be as long as the income beneficiary's lifetime, the remaining trust assets are distributed to one or more qualified charities. In this way, the original account owner can support their philanthropic goals and ensure their families are provided for. When a CRT is designated as the beneficiary of an IRA, the entire IRA balance is transferred directly to the trust upon the account holder’s death. Because a CRT is a tax-exempt entity, no income tax is recognized or paid upon the liquidation of the IRA. The full, undiminished account remains intact within the trust. The income beneficiary is guaranteed to receive a predictable flow of income. Because the distributions are made slowly over time, it reduces the likelihood that the distributions will push the income beneficiary into a higher tax bracket. As such, the beneficiary is likely to pay less overall income tax liability than if they had been named the outright beneficiary of the IRA. In addition, because the CRT is a tax-exempt trust, the assets in the CRT will continue to appreciate tax-deferred. If the CRT is structured to last for the duration of the income beneficiary’s life, the time horizon from which the distributions must be made from the account has effectively been increased from ten years to as much as several decades or longer. This creates significant potential that the total distributions to the income beneficiary will exceed what they would have received had they been named the outright beneficiary of the account. Finally, the estate of the original account holder benefits from an estate tax deduction equal to the actuarial value of the interest that passes to charity. In states such as New York, Washington, or Oregon, where the state estate tax exemption amount is much less than the federal estate tax exemption amount, this may be a valuable deduction. Key Considerations and Conclusion It is important to note that pursuant to Section 664 of the Internal Revenue Code, a CRT must distribute at least 5% (but no more than 50%) of its value annually to the income beneficiary. In addition, at least 10% of the actuarial value of the account must ultimately pass to the charitable remainder beneficiary. This can mean that naming very young income beneficiaries, such as grandchildren, may not satisfy the actuarial test. Although estate tax concerns have diminished for many individuals, the income tax exposure their heirs will face, with even modestly valued inherited IRAs, remains a significant challenge for wealth transfer. The SECURE Act forces beneficiaries to recognize substantial taxable income in a compressed time frame. For the right client, a charitable remainder trust offers a compelling solution, providing tax-efficient income deferral and reducing overall tax drag while supporting philanthropic goals. A CRT transforms a tax-inefficient asset into a powerful tool for preserving wealth and legacy. In today’s environment, proactive income tax planning is not optional; it is essential.
July 2, 2026
Property Management Playbook
Offit Kurman's Landlord Representation group is launching a new video series: the Property Management Playbook. Hosted by Billy Cannon alongside colleagues Brian Dorwin, Jennifer Jean-Gilles, and Gwen Roye-Harrison, this series digs into the real-world scenarios property management clients face every day. Topics include handling argumentative tenants, maintenance best practices, and fair housing dos and don'ts. Watch the full series to get practical guidance straight from Offit Kurman's landlord representation attorneys.
July 1, 2026
Estates and Trusts
Top Five Probate Litigation Trends: What Estate Planners and Trust Practitioners Need to Know
The United States is in the midst of a historic generational transition. The so-called “Great Wealth Transfer” is estimated to exceed $84 trillion in assets passing from Baby Boomers and the Silent Generation to their heirs over the coming decades. This wealth transference is reshaping the landscape of estate administration and trust practice. Against this backdrop, an aging population, the rising complexity of blended family structures, and the rapid proliferation of digital assets are combining to produce unprecedented levels of estate probate and trust litigation. Courts across the country are contending with both more numerous and meaningfully more complex disputes than those of prior generations. Much like the Midwest’s flat dustbowl lends itself to more frequent tornadic activity than elsewhere in the country, here in the “DMV” (D.C./Maryland/Virginia), home to a dense concentration of federal employees, government contractors, military families, and high-net-worth households, conditions are particularly ripe for contested estate and trust dispute activity. It shouldn’t be a surprise, therefore, that Virginia's and Maryland’s Circuit Courts, and D.C.'s Probate Division are all experiencing a meaningful uptick in contested proceedings. The five trends identified below reflect the most consequential litigation developments that estate planners and trust practitioners in this region should be tracking in 2026. UNDUE INFLUENCE CLAIMS ARE SURGING Caregiver-beneficiary relationships, late-in-life marriages, and deathbed changes to estate plans are generating a wave of undue influence claims across the DMV region consistent with the nationwide trend. And with statutory changes favoring the challengers, such claims are only likely to continue to increase. Virginia's multi-part undue influence test and shifting evidentiary burdens, nominally at least, favor challengers of wills, see § 64.2-454.1. and, with a newly-enacted equivalent governing the trusts context, effective as of July 1, 2026, of trusts as well, see § 64.2-724.1. In situations where undue influence may be presumed from basic circumstances, often easily established by the challenging plaintiff, cases of late have become more about an accused’s needing to disprove wrongdoing than about the skeptical plaintiff’s duty to prove the contrary. Alleged influencers who occupied a position of trust or physical dependency should presume a legal challenge when changes to testamentary planning result in a plan favoring the one in that position for the decedent. In Maryland, the Court of Appeals (FKA the Court of Special Appeals) has affirmed that undue influence may be proven through cumulative inference, permitting plaintiffs to build their cases through patterns of conduct rather than direct evidence. In D.C., the Probate Division has demonstrated a notable willingness to allow contested matters to reach trial based on affidavit evidence alone, lowering the practical threshold for advancing such claims. For the devoted family member who has done only right by their deceased parent(s) while asking or expecting nothing in return, a parent’s reward of a greater than equal distributive share may result in little more than authorized judicial scrutiny and second-guessing of actions taken when t-crossing and i-dotting were not the primary (or even secondary) priority. These shifted burdens may operate unfairly to the detriment of the selfless doting loved ones their dying parents saw fit to reward, but we have decided societally to err in favor of protecting against overriding our elders’ testamentary intentions over the perceived substantially more limited likelihood that the decedent independently intended and resolved to recognize and reward their loved one’s selfless kindness. We have effectively shifted the presumption in this context to one of expected wrongdoing by anyone rewarded by a dying loved one. Practice Tip: Document the testator's independent judgment at every planning stage, especially for any amendment in contemplation of more imminent death. Consider independent counsel for vulnerable clients and retain contemporaneous notes of all meetings. LACK OF TESTAMENTARY CAPACITY CHALLENGES Dementia diagnoses are rising in lockstep with an aging client base, and contests premised on lack of testamentary capacity are becoming more common and considerably more sophisticated. The classical four-pronged capacity standard, i.e., requiring that a testator understand the nature of the testamentary act, the character and extent of their property, the natural objects of their bounty, and the nature of the will itself, remains the legal benchmark across the DMV jurisdictions, but the evidentiary battles to establish or defeat capacity have grown considerably more technical. Plaintiffs now routinely retain geriatric psychiatrists and forensic neurologists as expert witnesses, and the battle of the experts has become a defining feature of capacity litigation. Virginia Code §§ 64.2-403 and -404 govern will execution formalities (and/or the excusability of noncompliance therewith), and courts scrutinize compliance with these requirements closely when capacity is disputed, particularly regarding the role of attesting witnesses and notaries. Practice Tip: Consider recommending a contemporaneous medical assessment for clients with any documented cognitive impairment; consider a "golden period" video execution for “high-risk” matters, but recognize the “red flag” signal such a step may suggest and/or the potentially disproportionate impact of even the most minor lapses or misstatements. Likewise, a capacity assessment memorandum prepared by the drafting attorney at the time of execution might be invaluable in future litigation but is not without its own caveats. DIGITAL ASSETS AND CRYPTOCURRENCY DISPUTES The valuation, access, and proper distribution of digital assets, including, as relevant examples, cryptocurrency wallets, non-fungible tokens (NFTs), online brokerage accounts, and internet-based business interests, are creating novel litigation flashpoints that earlier probate frameworks were not designed to address. Virginia has enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) (Va. Code §§ 64.2-116 et seq.) to provide fiduciaries with clearer statutory access rights, but significant disputes persist around the possession of private cryptographic keys, the policies of third-party exchange platforms, and the correct estate-date valuation methodology for inherently volatile assets. Maryland and D.C. have enacted comparable RUFADAA statutes, yet litigation in all three jurisdictions reveals that statutory authorization and practical access remain separated by a significant gap, particularly where a decedent leaves no organized record of digital holdings or credentials. Practice Tip: Ensure all estate plans include a digital asset inventory and an explicit fiduciary authorization clause; counsel clients to use platform legacy contact and beneficiary designation tools where available. A securely stored credentials memorandum, separate from the will, can prevent years of unnecessary litigation. ELDER FINANCIAL EXPLOITATION AND CONSERVATORSHIP LITIGATION Adult protective services referrals, emergency guardianship petitions, and civil claims for financial exploitation of vulnerable adults are rising sharply across all three DMV jurisdictions. Virginia's Adult Protective Services statutes (Va. Code §§ 63.2-1600, et seq.) and the Commonwealth's criminal elder abuse statutes are being deployed with increasing frequency in tandem with civil probate remedies, including claims for constructive trust, disgorgement, and punitive damages. Contested guardianship and conservatorship matters in Virginia Circuit Courts seem to have grown substantially in both volume and procedural complexity, with courts appointing guardians ad litem (“GALs”) with greater frequency to safeguard the interests of alleged incapacitated persons. In Maryland, the intersection of the Health Care Decisions Act with surrogate decision-making disputes has generated a distinct body of contested proceedings, particularly where family members disagree about the scope of an agent's authority under a durable power of attorney. Practice Tip: Counsel aging clients to establish durable powers of attorney, advance medical directives, and revocable trusts proactively BEFORE capacity becomes an issue. Encourage regular monitoring of financial accounts for irregularities and consider the use of trusted contact designations with financial institutions. TRUST MODIFICATION, DECANTING, AND NO-CONTEST CLAUSE DISPUTES Irrevocable trusts formed decades ago are being challenged, modified, or decanted with growing frequency as family circumstances evolve and tax laws change. Virginia's Trust Decanting Act (Va. Code §§ 64.2-779.1, et seq.) provides a statutory mechanism for trustees to distribute assets from one irrevocable trust to a second trust with more favorable terms (a process that is itself a growing trend), but this power is increasingly being contested by remainder beneficiaries who argue that decanting impermissibly alters their vested interests. No-contest (or in terrorem) clauses, long regarded as effective deterrents to meritless litigation, are being strategically challenged as beneficiaries weigh the financial calculus of contesting large estates and assess the likelihood of clause enforcement. Maryland courts have historically enforced in terrorem clauses with relative strictness, while D.C. courts have applied them more flexibly, creating meaningful jurisdictional variation within the same metropolitan region. Practice Tip: When drafting no-contest clauses, consider including explicit carve-outs for good-faith challenges based on capacity or undue influence and/or gross mismanagement or self-dealing. Blanket clauses discourage otherwise meritorious litigation. Review irrevocable trusts periodically for decanting candidacy, particularly those with outdated distribution standards or unfavorable trustee succession provisions. Conclusion The litigation trends documented here share a common thread: each is, at its core, a failure of planning, whether a failure to document, communicate, update, or anticipate. Proactive, well-documented estate planning remains the most reliable and cost-effective litigation prevention tool available to practitioners and their clients. Comprehensive planning that accounts for cognitive vulnerability, digital asset complexity, blended family dynamics, and evolving trust structures will materially reduce the risk of costly, protracted disputes. Practitioners serving clients in the DMV region are well-served by engaging colleagues who bring broad, multidisciplinary expertise to complex estate matters. If you do not believe you are equipped to navigate the generational, jurisdictional, and asset-class complexity that defines modern estate and trust practice, seek help. Remember, it is not failure to admit you don’t know it all, rather consider it more of a professional imperative.
June 30, 2026
International
International Trade: Service of Process and Default Judgments Can Reach You in Unexpected Ways
A recent Second Circuit decision offers a valuable lesson for foreign companies dealing with U.S. counterparties: a plaintiff may effect service of process through a collection agent, even if that agent was not expressly authorized to accept service of process on the company’s behalf. Ryniker v. Sumec Textile Co. Ltd., 177 F.4th 365 (2d Cir. 2026). The Second Circuit reinstated a default judgment against a Chinese creditor, Sumec Textile Company Limited, following a convoluted procedural path from bankruptcy court to district court, then bankruptcy court again and a rare direct appeal to the Second Circuit. As they say, the devil is in the details. A closer look at the background helps explain why the court reached that result. Décor Holdings, Inc. and its affiliates were sellers of decorative fabric that filed voluntary Chapter 11 petitions on February 12, 2019. They listed Sumec Textile Company Limited, a Nanjing, China-based textile manufacturer, as their second-largest unsecured creditor. Sumec Textile Company Limited held an export credit insurance policy with China Export & Credit Insurance Corporation, known as Sinosure, and submitted an insurance claim to Sinosure for the unpaid balance owed by the debtors. Before Sinosure paid on the insurance claim, Sumec Textile Company Limited executed a Collection Trust Deed authorizing Sinosure to collect, “on our behalf,” the “full amount” of the debt owed by the debtors, $3,029,719.52, and granted Sinosure “full power” to exercise collection rights and remedies in Sumec Textile Company Limited’s name or Sinosure’s own name. Sinosure then hired Brown & Joseph, LLC, a U.S. collection agency, to collect the debt. Sinosure’s instructions to Brown & Joseph granted it “full power” to exercise collection rights and remedies for “amicable debt collection.” The Collection Trust Deed, however, did not authorize Sinosure to accept service of a summons or complaint on Sumec's behalf or act in any way for Sumec. To assist in debt collection, Sinosure hired the Detroit-based collection agency Brown & Joseph LLC (“B&J”). The scope of B&J's authority and services was set forth and limited by a Trust Deed and Letter of Instruction dated March 4, 2019. There is no language in the Trust Deed and Letter of Instruction that authorizes B&J to accept service of process on behalf of Sumec. B&J filed a proof of claim in Décor Holdings, Inc.’s bankruptcy on behalf of Sumec. The dispute arose when a litigation administrator later commenced an adversary proceeding seeking to recover payments made to Sumec and to disallow Sumec’s claim. The summons and complaint were mailed to Sumec “in care of Brown & Joseph” at the address listed on the proof of claim. Brown & Joseph engaged with the plaintiff after service, stating it was reviewing the matter with “our client and the creditor,” referencing an ordinary course defense, and noting that Sumec believed the payments “were made in the ordinary course of business.” Despite these communications, Sumec never appeared, and a default judgment was entered. The central issue on appeal was whether Brown & Joseph qualified as an “agent authorized by appointment or by law to receive service” under Bankruptcy Rule 7004, even though the governing documents did not expressly authorize it to accept service of process. The Second Circuit answered yes, holding that Brown & Joseph had implied actual authority to accept service on Sumec’s behalf. The Court emphasized that actual authority is not limited to what is expressly stated. It includes authority “to perform acts necessary or incidental to achieving the principal’s objectives, as reasonably understood from the principal’s manifestations.” Here, Sumec had authorized Sinosure to collect the “full amount” of the debt, and Sinosure had in turn authorized Brown & Joseph to do the same. By filing a proof of claim in Sumec’s name and designating itself as the recipient for notices, Brown & Joseph positioned itself as the functional representative of the creditor in the bankruptcy case. Critically, the adversary proceeding did not exist in isolation. It sought not only to recover alleged preferences but also to disallow the very claim Brown & Joseph had been authorized to pursue. In that context, they rejected the argument that express authorization to accept service was required. Instead, it reasoned that authority to recover the “full amount” necessarily included authority to receive notice of litigation that could reduce that recovery. As the Court put it, actual authority may be implied from the principal’s objectives, and here those objectives made service on Brown & Joseph appropriate. The Court therefore reinstated the default judgment. For foreign creditors, the implications are significant. This decision underscores that delegating collection authority and allowing a default to be entered may carry material negative consequences that extend beyond simple debt recovery. Even where agency documents state that the agent does not have authority to accept service, a court may find otherwise based on the scope of the assignment and the surrounding circumstances. Interestingly, in this case, the creditor had posted a bond to stay enforcement during the appeal process and the reinstatement of the default judgment clears the path to satisfying the judgment quickly. The takeaway is straightforward but important: foreign companies should carefully define and, where appropriate, limit the authority granted to insurers, factors, and collection agents. Absent clear boundaries and active oversight, service of process on a U.S. agent may be sufficient to bind a foreign creditor even where the creditor has not expressly authorized the agent to accept service and the agent has affirmatively informed the plaintiff that it lacks such authority.
June 29, 2026
Estates and Trusts
Where There’s a Will — or a Trust — There’s a Way: A Practical Guide to Choosing the Right Estate Plan
Should you have a revocable trust or a simple will? As an Estates & Trusts attorney, this is one of the most common estate-planning questions I hear. For most Maryland residents, a simple will is perfectly adequate. A will directs how your assets will be distributed, names the person responsible for administering your estate, and allows you to designate guardians for minor children. Although a will does not avoid probate, Maryland’s probate process is generally efficient and straightforward, and it provides a clear forum for resolving disputes if they arise. But some of us have more complicated assets or circumstances. For example, you may be older and want someone to manage your finances in case you lose capacity. Or you might own a vacation home outside Maryland. In situations like these, a revocable trust can make it easier for someone you trust to take charge of your finances if the need arises, while streamlining the transfer of assets upon your death. Sometimes called a “living trust,” a revocable trust is established during your lifetime. Once the trust agreement has been signed, you should then follow your attorney’s instructions for transferring your assets into the trust. Real Estate. This typically involves recording a new deed — something your attorney or title company can handle. Bank Accounts. Checking and savings accounts can be retitled by taking a copy of the trust (or a shortened form, called a “Trust Certification”) to the bank. This is typically done by renaming the account from you individually, to you as the trustee of your revocable trust. Retirement Accounts & Life Insurance. These can be set up to transfer to the trust upon your death by completing a beneficiary-designation form naming the trustee as the beneficiary. Alternatively, it may be more advisable to name one or more family members as direct beneficiaries. Because either approach can have significant tax implications, be sure to consult your attorney before making changes. The benefit of all this legwork comes upon your death. The trust assets, called the “trust estate,” will transfer to your beneficiaries without unnecessary delay. If you do own property outside Maryland, it will transfer without the need for “ancillary probate,” essentially a second estate to be administered in the state where the other property is located. Key Advantages of a Revocable Trust Beyond avoiding ancillary probate, a revocable trust offers several additional advantages that may make it the better choice in the right circumstances. Incapacity Planning A will takes effect only upon death. By contrast, a revocable trust can provide for the management of your assets if you become incapacitated during your lifetime. If this happens, your chosen successor trustee can step in and manage trust assets without the need for court-appointed guardianship, which can be time-consuming, stressful, and costly. Privacy Unlike a will, which becomes part of the public record once it is filed with the Orphans’ Court, a revocable trust generally remains private. For individuals who value confidentiality, particularly those with strained family dynamics or complex financial holdings, this can be an important consideration. Continuity and Efficiency Because the trust holds title to the assets, there is no interruption in ownership at death. This continuity can simplify administration for your beneficiaries and reduce delays in distributing property, particularly when compared to even a streamlined probate process. Myths About Revocable Trusts Despite their advantages, revocable trusts are sometimes misunderstood. It is worth addressing a few common misconceptions: “A trust avoids all probate.” Not necessarily. Only assets that are properly titled in the name of the trust — or that pass by beneficiary designation or joint ownership — will avoid probate. Any assets left outside the trust may still require probate administration, which is why proper funding of the trust is essential. “A trust replaces a will.” Not entirely. Even if you have a revocable trust, you will still need a will, often called a “pour-over will.” This document serves as a failsafe and ensures that any assets inadvertently left out of the trust are directed into it upon your death. A pour-over will can also name guardians for any minor children and address other important matters not normally included in a trust. “A trust avoids taxes.” For most individuals, a revocable trust does not provide income- or estate-tax savings during your lifetime because you retain control over the assets. Tax planning typically requires additional strategies beyond a basic revocable trust. When a Will May Be the Better Choice While revocable trusts are powerful tools, they are not always necessary. Here is when a simple will may be all you need: Your assets are relatively straightforward You own property in only one state You have designated beneficiaries on retirement accounts, life insurance, and payable-on-death accounts You are comfortable with Maryland’s probate process A will is generally less expensive to set up and maintain than a trust, and it requires less administrative effort during your lifetime. For many families, it strikes the right balance between simplicity and effectiveness. The Importance of Proper Planning Whether you choose a will or revocable trust, it’s essential that you have an estate plan in place and keep it up to date. Changes in family circumstances, financial holdings, or the law may require updates over time. It is also essential that you coordinate your estate planning documents with your beneficiary designations and asset ownership. Missing or out-of-date beneficiary designations on retirement accounts or life insurance policies may derail an otherwise well-thought-out estate plan. Will vs. Trust: Which Is Right for You? There is no one-size-fits-all answer. The right approach depends on your assets, family dynamics, and personal preferences. For some Maryland residents, a will provides all the structure they need. For others, particularly those with multi-state property, concerns about incapacity, or a desire for privacy, a revocable trust offers significant advantages. Final Thoughts Estate planning is ultimately about making things easier for the people you care about most. Whether through a will or a revocable trust, the goal remains the same: to provide clarity, reduce stress, and ensure that your wishes are carried out efficiently. By understanding the differences between these planning tools, and by working with an experienced estates & trusts attorney, you can create a plan tailored to your needs and mindful of your legacy.
June 23, 2026
Intellectual Property
AI Back in Court: MiniMax Studio’s “In your Pocket” Faces Hollywood Studios Copyright Infringement Claims
When an AI company markets its product as a "Hollywood studio in your pocket," it probably shouldn't be surprised when Hollywood lawyers come knocking. Such is the lot of MiniMax, a Shanghai-based tech company whose video and image generation platform, Hailuo AI, became the target of a joint copyright lawsuit filed by Disney, Universal, and Warner Bros. Discovery in a California federal court last fall. The studios' complaint alleges that Hailuo AI was built on a foundation of stolen intellectual property: that MiniMax scraped and trained its model on the studios' copyrighted films without permission, and that the resulting platform can generate eerily accurate, downloadable images and videos of characters like Darth Vader, Wonder Woman, and the Minions, all with MiniMax's own branding slapped on them, at the push of a button. The lawsuit raises two distinct types of copyright infringement claims. The first involves the AI's training: the argument that feeding a model copyrighted films without a license is itself an unauthorized reproduction of those works, regardless of what the model later produces. The second involves the AI's outputs: the finished videos and images that directly replicate protected characters. The studios also pursued a theory of contributory infringement, arguing that MiniMax didn't just passively enable infringement, but actively encouraged it. The company's own promotional materials featured generated clips of the studios' characters, and it sponsored tutorial videos walking users through how to produce content like "Spider-Man and Supergirl kissing in the park." On May 22, 2026, a federal judge denied MiniMax's motion to dismiss, rejecting both the company's claim that a U.S. court lacked authority over a Chinese defendant and its argument that the studios hadn't stated a viable legal claim. On the contributory infringement theory in particular, the court found the studios' allegations sufficient to proceed. The studios have framed the stakes in stark terms, warning that as generative AI advances, it's only a matter of time before these tools can produce full-length unauthorized films. While that outcome remains speculative, the core legal question the case will force courts to answer is concrete: can an AI company build a commercial product on copyrighted works it never licensed, and then profit from an output that reproduces those works on demand? If the studios prevail, the answer will reshape how AI developers approach content licensing and what rights holders can expect in return. For now, MiniMax's motion to dismiss has been denied, the parties are headed toward discovery, and the "Hollywood studio in your pocket" is facing the real Hollywood in court.
June 22, 2026
Estates and Trusts
Why Membership in the Sandwich Generation Hits Professional Athletes Especially Hard
My trust and estate practice services multi-generational families and those in the “public” space, which includes actors, musicians, and professional athletes. In recent years, I have delved deeper into “sandwich generation” issues (a shorthand term for those of us in midlife balancing the competing demands of caring for aging loved ones while still supporting and launching our young-adult children). Three years ago, “The Sandwich Generation Survival Guide” podcast was launched to provide resources to those of us in the “middle.” It has been enlightening to see how deeply these sandwich generation issues are being felt by professional athlete clients. This demanding and dynamic phase of life for professional athletes is seemingly intensified, accelerated, and often financially magnified in ways that traditional planning frameworks fail to address for other clients. The core challenge for the athlete in the “sandwich” begins with timing. A professional athlete’s earning window is compressed, with peak income often arriving in their 20s or early 30s and career longevity uncertain at best. At precisely the moment when many athletes are earning the most, it appears they are prematurely finding themselves in the “sandwich generation,” certainly earlier than non-professional athlete clients, which typically begins in their late 30s and early 40s, as they are also expected (implicitly or explicitly) to provide for parents, siblings, extended family members, and, like many clients, their own children. This expectation creates a fundamental mismatch between short-term income spikes and long-term, multigenerational obligations. Unlike most clients who accumulate wealth over decades, athletes are frequently required to make high-stakes financial decisions quickly, without the benefit of time, experience, or perspective. Compounding this issue is the expansive definition of family that often surrounds professional athletes. Financial responsibility often extends far beyond the nuclear household to include parents who sacrificed to support the athlete’s career, siblings, and extended relatives who rely on the athlete’s success, and even broader community expectations to give back in meaningful and visible ways. When layered with the needs of a spouse, partner, or young children, the athlete becomes the financial center of a wide, and often informal network. This is the sandwich generation in its most amplified form. These pressures are not purely financial; they are deeply emotional. Many professional athletes grapple with how to set boundaries without damaging relationships, how to distinguish between one-time gifts and ongoing obligations, and how to manage expectations of others when their own income fluctuates, injuries occur, or careers end. Feelings of loyalty, gratitude, and identity are often intertwined with financial decision-making, making it even more difficult to approach these issues objectively. The result is a heightened risk of overextension, where generosity and obligation can easily outpace sustainability. Too often, these dynamics are managed informally, through direct payments, unstructured allowances, or verbal commitments that lack documentation or long-term planning. While well-intentioned, this approach creates significant legal and financial exposure, including tax inefficiencies, unequal distributions (leading to family conflict), and a lack of thoughtful asset protection. It also leaves athletes vulnerable in the event of incapacity, injury, or premature death, where there is no clear structure governing how support should continue or how assets should be preserved. Traditional estate planning models are not well-suited to a professional athlete’s reality. Estate plans are generally designed for clients with longer earning horizons, more predictable income streams, and narrower, more foreseeable definitions of financial responsibility and obligation. Professional athletes, by contrast, require planning that accounts for income volatility, public visibility, name and image value, complex family systems, and of course, the psychological weight of being the primary provider for multiple generations. A more effective estate planning approach reframes these obligations through structure and intentionality. Formal planning tools can transform informal support into sustainable systems, creating clarity, consistency, and accountability while alleviating some of the emotional burden. Thoughtful multigenerational planning allows athletes to support both parents and children without compromising their own long-term financial security, while sophisticated asset protection and tax strategies help preserve wealth in a high-risk, high-visibility environment. Just as importantly, introducing governance and financial education into the family dynamic can help manage expectations and foster a shared understanding of how resources are allocated. Professional athletes are not simply part of the sandwich generation; they often represent its most extreme expression. The convergence of high earnings, short careers, expansive obligations, and emotional complexity creates a unique set of challenges that cannot be addressed with conventional planning alone. When approached strategically, however, this period of financial intensity can become an opportunity to build a lasting, multigenerational legacy. The key lies in shifting from reactive, informal support to deliberate, well-structured planning that reflects both the realities of an athlete’s career and the broader family system they support.
June 22, 2026
Labor and Employment
Untrained Managers Create Legal Risk: Federal Training Requirements Every Employer Must Follow
Many employment lawsuits I have handled on behalf of employers had something in common: a manager made a deficient decision or failed to act appropriately because no one had trained them properly. Sometimes the decision was a termination made without documentation. Sometimes it was a failure to recognize a harassment complaint and how to respond. Sometimes it was a well-meaning accommodation conversation that crossed a legal line. The lesson is not complicated. Under federal law, your managers are your company’s legal agents. When they act, or fail to act, the law generally treats it as the company acting. Liability flows upward. Training is the mechanism by which you limit that exposure. Title VII of the Civil Rights Act of 1964, along with the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA), prohibits workplace harassment based on protected characteristics. The EEOC’s enforcement guidance makes clear that employers are expected to take reasonable steps to prevent and promptly correct harassment. But the most compelling reason to train managers is a practical defense, not a moral one. Under Faragher v. City of Boca Raton (1998) and Burlington Industries v. Ellerth (1998), the Supreme Court held that an employer may avoid vicarious liability for a supervisor’s harassment — if no tangible employment action resulted — by demonstrating two things: (1) that the employer exercised reasonable care to prevent and correct harassing behavior; and (2) that the employee unreasonably failed to use the employer’s preventive or corrective opportunities. You cannot establish the first prong without documented manager training. Courts consistently look for: A written anti-harassment policy that is distributed to all employees A complaint procedure that bypasses the immediate supervisor when that supervisor is the alleged harasser Regular, documented training for managers on recognizing, reporting, and responding to harassment complaints Training that addresses bystander intervention obligations and retaliation prohibitions Practical Tip Managers must understand that their obligation is not merely to avoid harassing behavior themselves, it is to act when they observe or learn of harassment by others. A manager who witnesses harassment and does nothing creates employer liability, regardless of whether there is a reporting policy. Quick Reference: Federal Manager Training Obligations The table below summarizes the primary federal laws that impose manager training requirements and the key compliance obligations in each area. The Bottom Line for Employers Federal employment law does not require perfection. What it requires is a good-faith, documented effort to comply. In practice, that means written policies, a functional reporting structure, and — above all — managers who are trained, periodically re-trained, and held accountable for what they know. When a lawsuit or agency charge arises, one of the first things plaintiff’s counsel and investigators request is documentation of manager training. The question they are asking is simple: did this company do what a reasonable employer would do to prevent this from happening? Training records, or the absence of them, answer that question before the first deposition is taken. If your organization does not have a structured manager training program addressing each of the areas discussed in this article, now is the time to build one. The investment is modest. The cost of the alternative is not.
June 19, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 3: A Delaware Opinion Is Not a Substitute for Local Counsel
A Delaware legal opinion serves a specific purpose: it provides opinions regarding a Delaware entity and matters governed by Delaware law. It is not intended to address every legal issue arising from a transaction, nor is it a substitute for local counsel opinions involving the laws of other states. Understanding this distinction can help avoid unnecessary opinion negotiations, reduce closing delays, and ensure that opinion requests are appropriately tailored to the role of Delaware counsel. When a lender requires a Delaware legal opinion, it is typically because a borrower, guarantor, or other transaction party is organized and exists under Delaware law. The lender seeks assurance that the Delaware entity has been properly formed, remains in good standing, possesses the necessary power and authority to enter into the transaction, and has properly authorized the execution and delivery of the loan documents. Depending upon the scope of the engagement, Delaware opinion counsel may also provide an enforceability opinion regarding the loan documents against the Delaware entity.1 These opinions are important because Delaware law governs the internal affairs of Delaware corporations, limited liability companies, limited partnerships, and statutory trusts. Delaware counsel is uniquely positioned to analyze these issues and provide opinions concerning Delaware entity law. One common misconception is that because a Delaware entity is involved in a transaction, Delaware counsel should be able to opine on all aspects of the deal. In reality, the scope of a Delaware opinion is generally limited to matters of Delaware law. For example, assume a Delaware limited liability company owns commercial real estate in Arizona and grants a mortgage to secure a loan. Delaware counsel may provide opinions regarding the existence, good standing, power and authority, due authorization, and, if requested, the enforceability of the loan documents against the Delaware entity. However, Delaware counsel generally would not opine regarding: The validity of the Arizona mortgage General enforceability of the loan documents Compliance with Arizona recording requirements Perfection or priority of liens under Arizona real property law Title matters affecting the property State-specific licensing or regulatory requirements Those issues are typically addressed by Arizona counsel, title companies, or other professionals familiar with Arizona law. Likewise, when collateral is located in multiple jurisdictions, local law issues may arise concerning recording statutes, fixture filings, landlord consents, or other state-specific requirements that fall outside the scope of a Delaware opinion. To those unfamiliar with opinion practice, the requirement for several legal opinions in a single transaction may appear duplicative. In reality, each opinion addresses a different body of law. Consider a loan transaction involving a Delaware borrower, real estate located in Texas, and loan documents governed by New York law. The lender may require a Delaware opinion concerning the borrower's existence, authority, authorization, and related Delaware law matters; a Texas opinion addressing real estate and mortgage issues; and a New York opinion regarding matters governed by New York law. Each attorney is providing opinions within the scope of his or her jurisdictional expertise. The lender is not seeking multiple attorneys to answer the same question. Rather, the lender is assembling a comprehensive package of legal assurances covering the various legal issues presented by the transaction. Many opinion disputes arise because the parties have different expectations regarding the scope of the Delaware opinion. Opinion requests are often copied from prior transactions without considering whether the requested opinions are appropriate for Delaware counsel. When lender's counsel, borrower's counsel, and Delaware counsel clearly understand the purpose of a Delaware opinion, the process becomes significantly more efficient. Opinion requests can be tailored appropriately, revisions can be minimized, and transactions can move toward closing with fewer delays. A Delaware legal opinion remains a critical component of many commercial lending transactions involving Delaware entities. However, it is only one piece of a broader legal due diligence framework. Delaware counsel addresses Delaware law issues relating to the entity. Local counsel addresses issues governed by the laws of other jurisdictions. Together, these opinions provide lenders with the assurances necessary to complete complex transactions while ensuring that each opinion giver remains within the scope of their expertise. 1This is not the general enforceability of the loan documents, which is an opinion local counsel provides, it is only the enforceability as to the Delaware entity.
June 18, 2026
Labor and Employment
Beyond Bostock: Legal Gaps Affecting LGBTQIA+ Workers
In its landmark decision in Bostock v. Clayton County, the Supreme Court held that discrimination based on sexual orientation is illegal under Title VII. This sweeping ruling changed the legal landscape for homosexual and transgender employees, ensuring that key anti-discrimination laws also protect them in the workplace. In it, the Court makes clear, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” While Bostock marked a major victory for LGBTQIA+ workers, its reasoning leaves important gaps — particularly for bisexual, asexual, and nonbinary individuals, as well as in areas like healthcare coverage. Bisexuality The Supreme Court could not have been clearer in Bostock that Title VII “works to protect individuals of both sexes from discrimination and does so equally” (emphasis added). As stated above, this clarity extends to homosexual and transgender individuals. Where the waters become murky is in instances where individuals do not fit neatly into the gender binary, or when their sexuality is neither heterosexual nor homosexual. The Sixth Circuit recently posited in Hamm v. Pullman SST, Inc., “Does Bostock’s but-for logic also prohibit employers from discriminating against those who are bisexual?” It then declined to answer that question or address whether bisexual, asexual, or otherwise queer orientations would be covered equally. Taken to its logical limits, Bostock’s but-for framework raises difficult questions about how bisexual or asexual individuals fit within Title VII protections. The Bostock Court explained that “if changing the employee's sex would have yielded a different choice by the employer, a statutory violation has occurred.” In the case of bisexual, asexual, or other orientations, however, changing the employee’s sex may not necessarily change the outcome. The example provided by the Supreme Court is illustrative: The two individuals are, to the employer's mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions it tolerates in his female colleague. Put differently, the employer intentionally singles out an employee to fire based in part on the employee's sex, and the affected employee's sex is a but-for cause of his discharge. Applying this standard to a bisexual employee, one might imagine a male employee terminated for being attracted to both men and women. If the employer were to terminate a female employee for being attracted to both men and women, the termination would not necessarily be discriminatory under a strict but-for analysis. The same logic could apply to employees who are attracted to neither men nor women. Nonbinary Individuals Courts have not yet squarely addressed whether Bostock extends Title VII protections to nonbinary individuals — those who identify outside of the male/female gender binary. This presents a closer question. On the one hand, the Court’s reasoning in Bostock relies heavily on a binary conception of sex. On the other, nonbinary status is arguably “inextricably bound up with sex,” as an employer who discriminates against a nonbinary individual necessarily treats that employee differently because of sex-based considerations. Gender-Affirming Care Bostock also raises practical questions for employers, particularly with respect to benefits. For example, must employers provide gender-affirming care on equal terms across genders? The Eleventh Circuit addressed part of this issue in September 2025 in Lange v. Houston County, Georgia, holding that employers may categorically deny coverage for gender-affirming surgeries so long as the policy applies “regardless of [the employees’] biological sex.” In reaching this conclusion, the court relied heavily on United States v. Skrmetti, reasoning that classifications based on medical use do not implicate Title VII because “a key aspect of any medical treatment is the underlying medical concern the treatment is intended to address.” This focus on medical reasoning eliminates the gender question, thus allowing employers a broader ability to determine what conditions to cover. Conclusion Bostock was a transformative decision, but it is not the final word. As courts continue to grapple with bisexuality, nonbinary identity, and healthcare benefits, its promise remains uneven in application. For employers, the safest course is to interpret Title VII broadly when reviewing workplace discrimination and benefits policies, while remaining mindful of evolving protections for employees across the LGBTQIA+ spectrum.
June 17, 2026
Landlord Representation
What DC's Fair Housing Practices Amendment Act of 2025 Means for Landlords and Tenants
The DC Council is moving forward with legislation that could reshape how landlords charge tenants — both during a tenancy and after a tenant moves out. The Fair Housing Practices Amendment Act of 2025 (Bill 26-126) amends the long-standing Rental Housing Act of 1985 and, if enacted, will introduce new notice requirements, restrict certain fees, and limit how utility costs are passed along to renters. Here's a plain-language look at what the bill does and what it could mean for you, whether you own rental property or rent your home in the District. A New Process for Charging Tenants After Move-Out One of the bill's central changes adds structure to how landlords pursue money owed after a tenancy ends. Under the new rules, when a tenancy terminates, the housing provider must first ask the departing tenant for a forwarding mailing or email address so that required notices can be delivered. Within 45 days of the tenancy ending, the landlord must notify the tenant in writing — either in person or by certified mail to the tenant's last known address — of any alleged unpaid amounts. Those amounts may include unpaid rent, damage beyond ordinary wear and tear, or charges for removing items the tenant left behind. Critically, the notice can't simply assert a dollar value. It must include documentation supporting the claim, along with a statement informing the tenant of their right to dispute it, and the landlord's contact information. Tenants then have 30 calendar days from the date of service to dispute the charges and provide evidence that the amount is inaccurate or has been wrongly attributed to them. If a tenant does so, the landlord must respond in writing within 10 days. And before any unpaid amount can be sent to a debt collector, the landlord must be able to show that the tenant was served with the required notice at least 60 days earlier. For landlords, the practical takeaway is clear: documentation and timing matter more than ever. No More Service or Administration Fees for Utilities The bill also amends a portion of the Rental Housing Act to prohibit landlords from charging tenants — before move-in, during the tenancy, or after move-out — for services the landlord is already legally required to provide. These are services tied to the implied warranty of habitability and to Titles 12 and 14 of the DC Municipal Regulations. The legislation specifically calls out fees related to utilities, trash, locks, and administrative fees for third-party billing as examples of charges that would no longer be permitted. While housing providers can still charge tenants for utilities based on usage, housing providers are forbidden from adding service or administration fees onto tenants' ledger. Limits on Billing Tenants for Common-Area and Vacant-Unit Utilities Beginning January 1, 2027, landlords — and any third party they contract with — will be prohibited from separately billing tenants, outside of monthly rent, for utilities accrued by a building's common spaces or vacant units. The bill defines common spaces broadly to include lobbies, leasing offices, business centers, pools, and fitness centers. "Utility" is likewise defined to cover electricity, gas, sewage and wastewater service, water, and internet or telephone usage. Importantly, the bill does not ban all utility cost-sharing. It expressly preserves the use of a Ratio Utility Billing System (RUBS), which allocates master-metered utility costs among tenants using a formula, such as one based on square footage, occupancy, or number of bedrooms. In other words, landlords can continue to distribute a building's actual metered utility costs among occupied units. What they cannot do is make tenants pay specifically for empty units and shared amenity spaces. What This Means for You If you own or manage rental property in the District, now is the time to review your lease agreements, fee structures, and move-out procedures so you're prepared well before the amended provisions take effect. Procedures regarding security deposit disposition and sending unpaid rent to collections will need to be updated and standardized. Every situation is different, and the way this legislation applies will depend on the specific facts of your lease and circumstances.
June 16, 2026
Labor and Employment
AI in Predictive Analytics for Employee Performance: Risk vs. Reward
Employers are increasingly deploying artificial intelligence (AI) and data-driven tools in performance management in an effort to promote consistency and reduce human bias. Yet these systems inherit the limitations of the data that fuels them, and workplace performance data is rarely neutral. Importantly, AI models are only as reliable as the information on which they are trained, and when that information reflects historical inequities or includes data correlated with protected characteristics, AI-driven performance metrics may perpetuate patterns that have long disadvantaged certain groups of employees. Performance data also frequently lacks critical context. Metrics such as output volume, response times, or client feedback often fail to account for legitimate sources of variation, including disability accommodations, intermittent or protected leave, caregiving responsibilities, or differences in job assignments. AI systems generally struggle to recognize these nuances, even though performance evaluations commonly inform high-stakes decisions involving promotions, compensation, and terminations. When adverse employment actions are grounded in incomplete or misleading data, employers may find it difficult to defend those decisions, particularly where they have a disparate impact on members of protected classes. The takeaway for employers is not to abandon AI, but to deploy it thoughtfully and lawfully. Employers should routinely audit performance data for bias, understand how AI tools weigh and interpret inputs, and train managers to assess AI-generated insights critically rather than accept them at face value. And always remember: human oversight remains essential.
June 16, 2026
Commercial Litigation
United States Tax Court Delivers Important R&D Credit Win for Architectural Innovation
The United States Tax Court released its opinion today on Smith v. Commissioner, T.C. Memo. 2026-50, and it is a significant R&D credit win for taxpayers that perform sophisticated technical work for clients. I am particularly satisfied with the outcome, having had the privilege of litigating this case. This matter involved research credits claimed by Adrian Smith + Gordon Gill Architecture, LLP, or AS+GG, for research activities performed in connection with large scale architectural projects during the 2008, 2009, and 2010 tax years. AS+GG is known for ambitious, complex, and highly sustainable architectural design. The projects at issue involved supertall towers, zero carbon and low energy design concepts, wind studies, solar orientation analysis, structural and environmental performance issues, and other technical design challenges. This context matters, as the case was not about routine design work. The opinion describes a firm working at the edge of what architecture, engineering, and sustainable design could accomplish. In that respect, the case is a useful reminder that R&D credits are not limited to laboratories, software companies, or manufacturing floors. Innovation also happens in design studios, engineering meetings, building models, wind studies, and iterative technical problem solving. The IRS Conceded the Four-Part Test One of the most important features of the case is what was not in dispute by the time of trial. The IRS ultimately conceded that AS+GG’s claimed business components satisfied the four-part test for qualified research under section 41(d). That concession mattered, and it did not happen by accident. A significant part of the case was devoted to developing the factual record on the nature of AS+GG’s work. Through extensive discovery, the taxpayers built the record showing that the projects involved real technical uncertainty, a process of experimentation, and design work directed at performance, sustainability, structure, energy usage, wind behavior, solar orientation, and other technical objectives. By the time of trial, the government no longer tried the case on the theory that the work failed the four-part test. Instead, the IRS conceded that issue, and the trial focused on the funded research exclusion under section 41(d)(4)(H). That is a major point. For taxpayers in architecture, engineering, design, and other technical service industries, the concession reinforces something important: sophisticated client work can involve qualified research. The remaining fight was not whether AS+GG’s work was research. It was whether the funded research rules limited the credit. The Funded Research Issue The funded research exclusion is one of the most important limitations on R&D credits for companies that perform technical work under customer contracts. Section 41(d)(4)(H) excludes research “to the extent funded” by another person. The regulations generally ask two questions: First, was payment contingent on the success of the research Second, did the taxpayer retain substantial rights in the research The Court applied that familiar framework. The taxpayers argued that, after Loper Bright, the Court should not simply accept the regulatory test and should instead adopt a narrower reading of “funded.” The Court rejected that argument and held that the funded research regulations remain valid. That part of the opinion is important, but it should not obscure the practical taxpayer win. Even applying the regulatory framework urged by the government, the taxpayers prevailed on the central issue that mattered most for four of the six sample projects: substantial rights. The Taxpayer Win: Substantial Rights The heart of the opinion is the Court’s substantial rights analysis. The Court held that AS+GG retained substantial rights in the research performed on four of the six sample projects: Atrium City Tower, Masdar HQ, Atrium City Masterplan, and Plot R2. That holding matters because a taxpayer that retains substantial rights in the research may still claim R&D credits on a reduced basis, even if the Court concludes that payments were not contingent on success. The practical result is that AS+GG was not treated as having simply performed fully funded research for a customer on those projects with no credit available. Instead, the Court recognized that AS+GG retained meaningful rights to use the results of its research in its business. That is a significant result in a funded research case. It is also a lesson in contract drafting. The Court did not treat intellectual property provisions, copyright language, licenses, confidentiality clauses, settlement agreements, and use restrictions as boilerplate. It parsed the language project by project. On some projects, the language preserved enough rights for the taxpayer. On others, it did not. That project-by-project analysis is one of the most useful aspects of the opinion. It shows that small differences in contract language can produce very different R&D credit outcomes. Why this Matters for R&D Credit Taxpayers Smith is especially useful for architecture, engineering, construction, consulting, design, and other technical service businesses. Many of these companies assume that R&D credits are unavailable because they perform work for clients. That assumption is too broad. A customer contract does not automatically eliminate the credit. The funded research rules are more nuanced. The key questions are who bears the relevant risk and whether the taxpayer retains meaningful rights in the research. The opinion reinforces several important points. First, design and architecture can involve qualified research. The Court’s factual findings describe technical work involving sustainability, wind, energy, structure, geometry, performance, and environmental constraints. Those are exactly the kinds of uncertainties that can support R&D credit claims when properly documented. Second, substantial rights matter. A taxpayer does not necessarily lose the credit merely because the customer receives project rights, licenses, or deliverables. The question is whether the taxpayer retained meaningful rights to use the research results in its own business. Third, contracts matter. The funded research analysis is driven heavily by the agreement between the taxpayer and the customer. Taxpayers who wait until audit to think about substantial rights are often too late. Fourth, documentation still matters. The Court left the precise credit amounts to be determined through computation. That is a reminder that winning the legal issue is not enough. Taxpayers also need project level documentation and expense substantiation that allow the allowable credit to be calculated. A Strong, Reasonable Compensation Win The opinion also includes an important win on reasonable compensation, an issue I personally handled at trial, and one of the most satisfying parts of the case. AS+GG’s R&D credit included wage related qualified research expenditures attributable to the partners. The government challenged the partners’ 2008 compensation under section 174(e), arguing for a much lower reasonable compensation amount. At trial, a central part of the taxpayers’ case revealed that the government’s reasonable compensation theory did not fit the economics of the business. That point came through clearly in the expert testimony. The IRS expert advanced a much lower compensation number under a multifactor analysis, but his own independent investor analysis showed that, even after his adjustments, AS+GG generated a 939% return on equity. On that math, he concluded that the partners’ total compensation was not unreasonable. That was a powerful trial point. The government’s expert opinion, when tested against the controlling Seventh Circuit standard, supported the taxpayers. The Court agreed that the independent investor test applied because the case was appealable to the Seventh Circuit. Once that standard governed, the result followed: the partners’ 2008 compensation was reasonable under section 174(e). That holding is meaningful for owner-operated businesses where the people driving the research are also principals of the business. In those cases, the R&D credit often depends not only on whether the work qualifies, but also on whether compensation paid to key technical leaders can be included in wage QREs. Here, the Court accepted the taxpayers’ position and preserved an important component of the credit. Practical Takeaways The biggest takeaway from Smith is that R&D credit planning should begin before the contract is signed. Taxpayers performing technical work for customers should review their agreements for at least three things: First, what happens if the research fails Second, who owns the work product, technical information, drawings, designs, models, methods, and other research results Third, does the taxpayer retain the right to use what it learned and developed in future work Those questions should be addressed in the contract itself. They should not be left to implication, course of dealing, or after-the-fact argument. This case also highlights the importance of project-level documentation. Taxpayers should identify the business components, the technical uncertainties, the process of experimentation, the employees or principals performing qualified services, and the expenses tied to the research. Conclusion Smith v. Commissioner is a significant R&D credit decision and a gratifying taxpayer win. The IRS conceded that the work satisfied the four-part test. The Court held that AS+GG retained substantial rights in four of the six sample projects and allowed the taxpayers to claim research credits to the extent permitted by the funded research rules. The Court also accepted the taxpayers’ position on reasonable compensation, preserving an important wage QRE issue. For taxpayers in architecture, engineering, design, consulting, and other technical service businesses, the message is encouraging: customer contract work does not automatically defeat the R&D credit. But the contract language matters, the retained rights matter, and the record matters.
June 16, 2026
Business
Why the Friendly PC Model Remains Critical to Healthcare Private Equity Transactions with Medical and Dental Practices
Private equity (“PE”) activity in healthcare across the United States has caused continued focus by state legislatures and enforcement agencies on the doctrines of corporate practice of medicine and dentistry (“CPOM” or “CPOD”). Notwithstanding this attention, the often-referenced “Friendly PC” model remains the optimal corporate strategy to ensure post-closing compliance with CPOM and CPOD regulations in most jurisdictions. The following identifies some key considerations for the agreement's ancillary to the purchase of the non-clinical assets by the PE company’s management services organization (“MSO”), which are commonly used to ensure compliance with CPOM and CPOD. Friendly PC Model As a general matter, the term “Friendly PC” model in PE healthcare deals most often refers to a business arrangement where a physician or dentist-owned professional corporation (“PC”) sells all of its non-clinical assets to an entity owned by the MSO (controlled by the PE firm), which then takes responsibility for the PC’s non-clinical business operations. This model complies with fundamental CPOM and CPOD legal requirements, which are designed to restrict non-physicians from owning or controlling medical practices. Such a structure prevents the PE buyer from owning clinical assets or unduly controlling the clinical operations and decision-making of the providers employed by the PC. In the “Friendly PC” structure, the parties designate a single clinical professional to serve as the sole owner of the PC post-closing. This individual is referred to as the friendly physician or dentist (“Friendly Provider”), who is then expected to cooperate with the PE buyer in accomplishing its business goals. Such a transaction requires the drafting of a series of agreements to accomplish the necessary purposes of the arrangement. Although the nature and scope of such agreements may vary slightly based upon preference and applicable state law, below is a brief description of certain key agreements, and their most necessary elements, to ensure the PC’s compliance with CPOM and CPOD laws post-closing. Management Services Agreement The Management Services Agreement (“MSA”) is entered into between the PC and the MSO, which is owned by the PE buyer. Through this agreement, the MSO is responsible for providing and arranging for certain non-clinical administrative, business support, and back-office services on behalf of the PC. The MSA will clearly state that the MSO entity will not play any role in the care of patients and will specify the limitations of the actual services to be provided so as to ensure it will not fall within the applicable state’s definition of the practice of medicine or dentistry. It is also very important that the MSA define the independent contractor nature of this commercial relationship and seeks to avoid creating a de facto partnership between the MSO and the PC.1 Overly lengthy initial contract durations, requirements for minimum operational hours per period, the ability to negotiate payor and other agreements without the PC’s consent, and compensating the MSO through a percentage of the PC’s profits are all commonly mishandled deal points that could create an unintended partnership in the eyes of a regulatory agency.2 As such, legal counsel must carefully tailor these provisions to avoid such a problematic presumption. Equity Transfer Restriction Agreement This agreement establishes a highly restrictive framework which governs the ownership and transfer of the Friendly Provider’s interests in the PC, giving the MSO near-complete control over any change in ownership. As a baseline rule, no transfer of equity—whether voluntary, involuntary, or by operation of law—may occur without the MSO’s prior written consent, which may be granted or withheld in its sole discretion. The central mechanism is a set of transfer events (e.g., death, disability, termination of services, loss of licensure, legal disqualification, divorce, regulatory issues, or breach of agreements), upon which the Friendly Provider’s entire ownership interest is automatically and immediately transferred—without notice or further action—to an MSO–designated transferee. This transfer occurs by operation of contract, is effective upon the triggering event, regardless of administrative formalities and is typically priced at a nominal $1.00. In addition, the MSO typically holds a unilateral call option enabling it to trigger a forced transfer of all equity at any time by delivering notice, which itself constitutes a transfer event and results in the same automatic $1.00 transfer to its designated transferee. Following any such transfer, the Friendly Provider is automatically stripped of all ownership, governance roles, and economic rights in the PC. The agreement further reinforces this control structure through ongoing covenants that prohibit the Friendly Provider and the PC from taking a wide range of corporate, financial, and operational actions without MSO approval, ensuring that both ownership continuity and strategic direction remain fully aligned with the MSO’s interests. Provider Employment Agreement The provider employment agreement is often viewed as the most important by medical professionals who are divesting their interest in the PC. It includes terms and conditions regarding compensation and various restrictive covenants (i.e., non-competition, non-solicitation, confidentiality) that are critical to the clinician’s relationship with the PC. Legal counsel should ensure that the employment agreement also contains specific provisions or guarantees that the clinical professionals will maintain broad autonomy in all clinical decision-making and treatment of patients post-closing.3 Under no circumstances may the PC exercise any undue control over this aspect of their clinical professional employees’ job performance, and expressly stating as such within this agreement may help the arrangement survive future scrutiny.4 Clinical Liaison Agreement Lastly, the Clinical Liaison Agreement (“CLA”), typically entered into by the PE management entity and the Friendly Provider, is a frequently used means to outsource the development and implementation of the medico-administrative services of the PC. As a licensed professional in the state of operation, the Friendly Provider is the only party legally authorized to provide such services as the supervision of clinical staff, the development of clinical policies, and the leadership of patient-related programs and initiatives. The existence of such an arrangement is therefore imperative for the post-closing clinical management of the PC. As with the other agreements, the CLA should involve a reasonable term length and consideration for the Friendly Provider’s time and effort, and it should also protect the Friendly Provider’s necessary autonomy to perform their duties as outlined therein.5 Conclusion As scrutiny of “Friendly PC” transactions continues in light of consumer and legislative concerns over the affordability of health care services, the need for proper separation of clinical and non-clinical management post-closing is likely to be more important now than in years past. As such, PE buyers and their counsel must pay close attention to these frequently overlooked ancillary agreements to ensure the truly independent nature of their post-closing relationships. 1See Warren J. Apollon, D.M.D., P.C. v. OCA, Inc., 592 F. Supp. 2d 906; and OCA, Inc., et al . Kellyn Hodges, D.M.D., M.S., et al., 615 F. Supp. 2d 477. 2Id. 3The definitions of “Practice of Medicine” and “Practice of Dentistry” vary by state, however, guidance provided by the Pennsylvania Board of Medicine provides examples of the types of rights and privileges of licensed providers that must not be interfered with or influenced by unlicensed persons or entities. (See 63 P.S. § 422.1, et seq., 63 P.S. § 120, et seq.) 4Id. 5https://journalofethics.ama-assn.org/article/physician-engagement-private-equity-firms/2025-05
June 15, 2026
Offit Kurman Blogs
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