Florida DABT Clarifies 13CT “Caterer’s” License Requirements Through Updated Rule
The Florida Division of Alcoholic Beverages and Tobacco (DABT) promulgated updated language for Rule 61A-3.057, governing catered event enforcement and recordkeeping requirements for 13CT licenses. The changes represent DABT’s response to ongoing compliance challenges that have consistently frustrated both state and local permitting agencies.
The 13CT license framework has long been plagued by a fundamental issue: the absence of a clear definition for “catered event,” the very concept that underpins the entire licensing model. This definitional gap creates confusion among regulators and licensees alike, making consistent enforcement difficult and compliance uncertain.
Compounding these definitional challenges, the relative ease of obtaining a 13CT license and the absence of specific regulatory requirements contributed to a troubling trend of illegal “license rental” arrangements, where unlicensed vendors operate under the banner of legitimate 13CT licensees. This practice undermines the regulatory framework and creates unfair competitive advantages for non-compliant operators.
The updated rule introduces several key changes designed to strengthen oversight and ensure compliance. The rule now requires licensees to maintain comprehensive records, clarifies that the event contract and receipts associated with a specific “catered event” must be maintained with the newly promulgated form during the entire duration of the event, and retained for a period of three years following the date of the event.
Further, the rule now specifies that a representative of the 13CT licensee must be present at all times during the catered contracted event, which targets the illegal renting of a license by ensuring that the person responsible for the sale of alcoholic beverages is in fact associated with the identified licensee rather than a third-party.
These changes signal DABT’s commitment to closing regulatory loopholes when such items are addressable and ensuring that 13CT licenses operate within their intended parameters. The enhanced recordkeeping requirements and mandatory compliance demonstrations will likely make it more difficult for unlicensed operators to exploit the 13CT framework through rental arrangements. The updated rule also provides greater clarity for legitimate caterers seeking to understand their obligations, while giving enforcement officials clearer standards for evaluation and compliance verification.
Operators currently holding 13CT licenses should review their current practices to ensure alignment with the new requirements, particularly regarding on-site representation, documentation retention, and the ability to demonstrate statutory compliance through sales records.
While this updated rule addresses many of the operational compliance issues that have plagued the 13CT licensing framework, the underlying definitional challenges around “catered events” remain unresolved. Future regulatory developments may need to tackle this fundamental definitional gap to provide complete clarity for the industry.
Operators currently holding 13CT licenses should review their current practices to ensure alignment with the new requirements, particularly regarding on-site representation, documentation retention, and the ability to demonstrate statutory compliance through sales records.
Congressional Budget Proposal Includes Adjustments to Dual-Eligible Enrollment Pathways and Medicare Savings Program Rules
In June 2025, the U.S. House of Representatives introduced a budget reconciliation bill titled the One Big Beautiful Bill Act (OBBBA). The legislation proposes a number of administrative changes to existing federal health programs, including modifications to automatic enrollment procedures affecting individuals who qualify for both Medicare and Medicaid. The bill does not repeal current benefit programs but includes provisions that would revise the process through which certain low-income individuals access premium and cost-sharing assistance programs.
Individuals who are eligible for both Medicare and Medicaid, commonly referred to as dual-eligible beneficiaries, accounted for approximately 14 percent of the Medicare population in 2021 and represented about 30 percent of Medicare fee-for-service spending, according to the Medicare Payment Advisory Commission. One program that serves this population is the Low-Income Subsidy (LIS), also known as “Extra Help,” which assists with Medicare Part D prescription drug premiums and other related out-of-pocket costs. The Centers for Medicare & Medicaid Services has estimated that the average annual value of this benefit is approximately $6,200 per beneficiary.
Under current law, individuals who are enrolled in Medicaid and subsequently become eligible for Medicare are automatically enrolled in LIS. The OBBBA proposes to eliminate automatic LIS enrollment for individuals who lose Medicaid eligibility. According to the Congressional Budget Office, which is a nonpartisan legislative agency, approximately 1.38 million individuals who are dually eligible for Medicare and Medicaid may lose their Medicaid coverage between 2025 and 2034. As a result, those individuals would no longer be automatically enrolled in LIS and would instead need to apply for the benefit directly through the Social Security Administration.
The OBBBA also includes provisions to delay implementation of certain federal regulations related to the Medicare Savings Programs, which help low-income individuals pay for Medicare Part B premiums and, in some cases, additional cost-sharing obligations. These regulations were finalized by the Centers for Medicare & Medicaid Services in 2023 and 2024 and were designed to streamline enrollment processes by reducing paperwork and simplifying eligibility verification. CMS previously estimated that these regulatory changes would result in approximately 860,000 new enrollees in the Medicare Savings Programs. The legislation proposes to delay the implementation of these provisions from 2027 to 2035.
The Congressional Budget Office projects that this delay would result in a reduction of federal Medicaid expenditures by approximately $162 billion over ten years. It also estimates that the change would lead to approximately 2.3 million fewer Medicaid enrollees during that period, of whom approximately 60 percent would be dual-eligible beneficiaries.
For individuals affected by these changes, the loss of Medicaid coverage would require separate applications to maintain access to both LIS and Medicare Savings Programs. LIS applications must be submitted to the Social Security Administration, while applications for Medicare Savings Programs are processed by individual state Medicaid agencies. These processes generally require income and, in some cases, asset verification. In addition to overseeing eligibility determinations, state Medicaid agencies would remain responsible for ensuring compliance with federal due process requirements, including adequate notice and appeal rights. Agencies would also need to confirm that enrollment procedures align with applicable civil rights and nondiscrimination laws.
The proposed legislation is currently under congressional consideration and may be amended prior to enactment. Stakeholders such as state Medicaid agencies, Medicare Advantage plans, healthcare providers, and beneficiary support organizations may wish to monitor further developments to assess potential operational and compliance implications. The changes outlined in the bill focus on administrative processes and eligibility pathways and do not modify the statutory structure of Medicare or Medicaid benefit categories.
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Maryland Court Rules EPA’s Termination of Environmental Justice Grants Violates APA
Changes in presidential Administration often mean changes in policy priorities and budgeting, but a Maryland federal district court recently held that the executive branch’s ability to pivot on policy has limits.
The decision in Green & Healthy Homes Initiatives, Inc., et al. v. EPA determined that the Trump Administration violated the federal Administrative Procedure Act (APA) when it cancelled all of the environmental justice (EJ) grants issued by the Biden Administration.
The decision interpreted the APA to constrain executive action and protect the integrity of federal grant programs. For grant recipients, the ruling affirms that statutory mandates cannot be set aside by administrative fiat and that courts will enforce the procedural and substantive limits imposed by US Congress. As the court noted, agencies must engage in reasoned, individualized decision-making and respect the boundaries of their delegated authority to ensure that properly issued federal grants are not casualties of shifting political winds.
Below, we break down the decision and takeaways for federal grant recipients inside and outside the EJ space.
Case Background
In 2022, as part of President Biden’s Inflation Reduction Act, Congress amended the Clean Air Act to create the Environmental and Climate Justice Block Grants program, appropriating $3 billion for grants to support pollution remediation, climate resilience, and related activities benefiting disadvantaged communities. (For more, see here.) The statute required the US Environmental Protection Agency (EPA) to use these funds for specified purposes and to award grants to eligible entities, including nonprofit organizations and local governments.
Pursuant to this mandate, EPA selected 10 Regional Grantmakers — including the plaintiffs in this case — and awarded them multi-year, multi-million-dollar grants to administer subgrant programs. However, earlier this year following a change in Administration, EPA announced that “environmental justice” was no longer an agency priority and terminated all grants under the program. (For more, see here.) The agency’s termination letters cited a lack of alignment with new agency priorities but provided little substantive explanation or individualized analysis.
The Green & Healthy Homes Decision
It was predictable that the whipsawing between the Biden Administration’s commitments to address EJ issues and the Trump Administration’s desire to “cancel” EJ (including these grants) would lead to litigation. In Green & Healthy Homes Initiative, the Minneapolis Foundation and Philanthropy Northwest filed suit challenging the termination of the grant funding under the APA, arguing that EPA’s actions were arbitrary and capricious, exceeded statutory authority, and violated their constitutional rights. The court agreed, holding that EPA’s terminations were both “in excess of statutory jurisdiction, authority, or limitations” and “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” as prohibited by 5 U.S.C. § 706(2)(A), (C). The court vacated EPA’s terminations and remanded the grant cancellation to the agency to be reevaluated, declining to issue a permanent injunction but making clear that the agency could not lawfully terminate the grants on the same grounds.
The ruling provides critical guidance on how the APA applies to federal grant terminations and clarifies the boundaries of executive discretion in administering congressionally mandated programs. Four primary takeaways include the following.
The statutes authorizing or requiring grant issuance can preclude the executive branch from reconsidering grant issuance. Similar to how courts have evaluated Trump Administration funding freezes (for more see here), the executive branch cannot unilaterally change Congress’s spending priorities. To be sure, the executive can unwind certain policies — prior Administration Executive Orders, as an example — without Congress. But agencies cannot terminate grants based solely on a change in Administration priorities where Congress directed that funds be used for specific purposes. For people or entities seeking to vindicate rights embodied in statutes, the APA serves as a check, ensuring that executive agencies cannot unilaterally override legislative directives.
Here, the court emphasized that Congress’s directive in the Clean Air Act was clear and mandatory; EPA “shall use” appropriated funds to support environmental and climate justice activities. The agency’s decision to terminate grants solely because the new Administration disagreed with the statutory purpose was found to be an impermissible override of congressional will. The court stated, “the President and federal agencies may not ignore statutory mandates or prohibitions merely because of policy disagreement with Congress.”
The APA’s “arbitrary and capricious standard” may apply to grant cancellations. Federal agencies must provide a reasoned explanation for terminating grants, supported by the administrative record and tailored to the facts of each case. Boilerplate justifications or reliance on generalized policy shifts often will not satisfy the APA’s standards.
Here, the court found that EPA’s process for terminating the grants contained no meaningful analysis or explanation. The agency relied on boilerplate language and a template letter, failed to provide individualized reasons for each termination, and did not consider the reliance interests of the grantees. The administrative record revealed that the only articulated rationale was a change in “administration priorities,” which the court deemed insufficient under the APA’s requirement for reasoned decision-making.
The executive branch lacks constitutional authority to terminate grants unless it has statutory discretion to do so. Green & Healthy Homes Initiatives reaffirms that courts can review grant terminations under the APA unless Congress has explicitly committed the matter to agency discretion. Even where regulations provide for termination based on agency priorities, that discretion is cabined by statutory mandates.
In this case, where federal regulations including 2 C.F.R. § 200.340 allow agencies to terminate grants that no longer effectuate program goals or agency priorities, that authority is expressly limited to the extent authorized by law. The court held that where Congress has imposed a specific, mandatory obligation on an agency, the executive branch cannot invoke general regulatory language or internal policy shifts to circumvent statutory requirements.
Reliance interests matter. Finally, agencies must consider the reliance interests of grantees, especially where significant investments have been made in reliance on multi-year federal funding. Here, EPA was required to provide a detailed justification for its policy priorities in light of preexisting, multi-year commitments made by grant makers.
New York Assembly Passes Bill to Fill Void as NLRB Lacks Quorum, Raising Preemption Concerns
As we previously reported here, since May 22, 2025, the National Labor Relations Board (“NLRB” or “Board”) has lacked a quorum of at least three members after the U.S. Supreme Court stayed the reinstatement of former Board Member Gwynne A. Wilcox following her firing by President Trump. As a result, the NLRB cannot issue decisions in representation and unfair labor practice cases. The Board has also been faced with constitutional challenges to its regime. (See here and here.)
To attempt to fill this void, on June 17, 2025, the New York State Assembly overwhelmingly passed legislation—referred to by the co-sponsors as the “NLRB Trigger Bill”—that would amend the New York Labor Relations Act to expand the jurisdiction of the Public Employment Relations Board (“PERB”) to essentially step into the role of the National Labor Relations Board (“NLRB” or “Board”) for private-sector employers.
Currently, PERB only oversees public-sector employees and private-sector employees that the NLRA (or the federal Railway Labor Act) do not cover, such as agricultural workers.
If signed into law by Governor Hochul, the NLRB Trigger Bill would permit PERB to act in the following ways if the NLRB does not “successfully assert” jurisdiction:
Representation Elections: To certify—upon application and verification—“any bargaining unit previously certified by another state or federal agency.” The plain text of the bill appears to indicate that PERB’s authority would apply only to bargaining units “previously certified” by the NLRB or another state—meaning it could not process representation petitions for new units that have not been certified.
Adjudicating Unfair Labor Practices / Improper Practices: To exercise jurisdiction over any previously-negotiated collective bargaining agreements and ensure those employment terms remain in full force and effect. Similar to the NLRB, PERB adjudicates unfair labor practices by investigating charges and prosecuting those charges before administrative law judges, and then PERB itself.
Under this bill, PERB’s jurisdiction would not apply where the NLRB “successfully asserts jurisdiction” over employees or employers pursuant to an order issued by an Article III federal court. In other words, if / when the NLRB retains a quorum and asserts jurisdiction, then PERB’s jurisdiction would cease.
Potential Preemption Challenges
If this bill become law, then employers likely will challenge it as preempted under the NLRA based on the Supreme Court’s landmark decision in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). In Garmon, the Court held that where there is even the potential for conflict between the NLRA and state or local law, then such state/local law is preempted. The Court in Garmon reasoned that the purpose of a broad preemption doctrine was to ensure a uniform national labor relations policy overseen by the NLRB—not a patchwork of state and local laws.
California and Massachusetts are considering analogous legislation, and we will closely monitor the progress of these bills, as well as any potential challenges that surface.
An Oft-Overlooked Requirement in the N.Y. Commercial Division Rules: The Rule 11-e(d) Statement of Completion
Effective April 1, 2015, the Commercial Division of the New York State Supreme Court promulgated a series of reforms to the Rules of Practice for the Commercial Division, including the addition of new Rule 11-e, which provides specific requirements for responding and objecting to document requests.
In particular, Rule 11-e(a)-(b) requires parties to provide particularized responses and specify in detail whether documents are being withheld in response to all or part of the requests, and Rule 11-e(c) requires a date for the completion of document production prior to depositions. These are markedly different than those required by the Uniform Civil Rules that govern non-Commercial New York State Supreme Courts and County Courts, and have been the subject of much discussion by courts and practitioners in the ensuing years. However, one significant requirement of Rule 11-e that is often overlooked concerns Rule 11-e(d).
In particular, Rule 11-e(d) provides as follows:
(d) [b]y agreement of the parties to a date no later than one (1) month prior to the close of fact discovery, or at such time set by the Court, the responding party shall state, for each individual request: (i) whether the production of documents in its possession, custody or control and that are responsive to the individual request, as propounded or modified, is complete; or (ii) that there are no documents in its possession, custody or control that are responsive to the individual request as propounded or modified.
In other words, in addition to responding and objecting to document requests at the outset with specificity as required by Rule 11-e(a)-(b), one month prior to the close of fact discovery or another date set by a court, parties are further required to issue a statement that specifically denotes for each request whether document production is complete as requested or modified, or that they are not in possession of responsive documents. Such a formal obligation at the conclusion of discovery to specify whether production is complete for each individual request is not found in the Uniform Civil Rules or the Federal Rules of Civil Procedure, and appears to be entirely unique.
Despite this, Rule 11-e(d) seems to have largely gone unaddressed in the last decade with most courts and practitioners focusing instead on the other significant requirements of Rule 11-e. Even so, as recently as 2023, in Men of Steel Enterprises, LLC v. Bespoke Harlem W., LLC, 2023 N.Y. Slip Op. 30404[U] (Sup. Ct. N.Y. Co. 2023), the Honorable Joel M. Cohen ordered plaintiffs to submit amended responses to comply with the requirements of Rule 11-e(d) and did so despite the fact that plaintiffs had already represented in their opposition that they had produced all responsive documents and did not have additional documents in their possession, custody, and control—demonstrating that the Rule is alive and well and may be enforced to the full extent, even if merely as a formality. While it remains unclear how focused courts will be on the requirements of Rule 11-e(d) statements going forward, including their form and use, those practicing in the Commercial Division should be prepared to comply with its requirements.
Five Things Every Health Care Provider Should Know About HHS OIG’s 2025 Semiannual Report
On June 2, 2025, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) published its Semiannual Report to Congress. This report covers the period from October 1, 2024, through March 31, 2025, and highlights the OIG’s key findings and recommendations for the reporting period.
Below are the five critical insights every health care provider should be aware of from the report.
1. Monetary Impact: OIG reported $16.61 billion in total for their work’s monetary impact, including $3.51 billion of the total from investigative receivables, which is money ordered or agreed to be returned to HHS or other governmental entities based on OIG investigations. The findings are evidence of OIG’s active enforcement during the reporting period.
2. Enforcement Actions and Exclusions: The OIG initiated a total of 744 enforcement actions, with a nearly equal distribution between criminal (349) and civil (395) actions. Additionally, over 1,500 individuals were added to the OIG exclusion list, rendering them ineligible to participate in federally funded health care programs. These findings highlight the OIG’s commitment to pursuing criminal and civil resolution of health care matters as well as health care program exclusions.
3. Medicare Advantage Program Oversight: The OIG identified significant issues within the Medicare Advantage risk adjustment program, including $13.6 million in net overpayments to three Medicare Advantage plans due to incorrect diagnosis coding. The evaluation revealed that in-home health risk assessments (HRAs) linked chart reviews generated $4.2 billion of the $7.5 billion in risk-adjustment payments. Consequently, the OIG recommended that the Centers for Medicare & Medicaid Services (CMS) impose additional restrictions on the use of diagnoses reported solely in in-home HRAs, indicating this area will likely be a focus of future OIG compliance monitoring.
4. Improper Payments: OIG found that CMS “made millions of dollars” in improper drug payments, resulting in unnecessary costs to the federal government and taxpayers. According to its report, this included $465 million for drugs covered under Medicare Part A but paid under Part D, $454 million for COVID-19 tests exceeding the monthly limit, and $190 million for outpatient services that were already covered. Given the impact of these payments, claims submitted for these services will likely face higher scrutiny from OIG and CMS in the future.
5. Fraud, Waste and Abuse: OIG evaluated and processed almost 31,000 tips that led to 17,000 referrals including to the Department of Justice and other agencies. During the review period, hotline complaints resulted in expected recoveries totaling $121 million according to the report.
The report demonstrates the OIG’s prioritization of effort to investigate fraud, waste and abuse allegations, and its willingness to seek both civil and criminal resolutions as well as federal health care program exclusion when appropriate. Importantly, the report provides insight into the OIG’s priorities and potential areas for future enforcement.
Employers Modifying Retiree Benefits Provided More Clarity Following SCOTUS Decision (US)
Some employers offer benefits not only to their current employees, but under certain circumstances also offer certain benefits, such as health insurance, to employees who retire from working for them. Employers sometimes modify the terms of benefit policies, programs, and plans for a number of reasons, including to change coverages or eligibility requirements or to adjust contribution rates. Employers looking to make these sorts of changes, or even to discontinue certain retiree benefits, can do so now with more confidence that they won’t violate the Americans with Disabilities Act (ADA) after a recent decision by the United States Supreme Court.
On June 20, 2025, the Court decided in Stanley v. City of Sanford, Florida that retirees, as former employees, are not covered by the ADA’s anti-discrimination provision when applied to receipt of certain post-employment benefits.
The case was brought by Karyn Stanley, a firefighter who worked for a Florida city’s fire department. When she was hired in 1999, the city offered health insurance until age 65 for employees who retired either with 25 years of service and or those employees who retired due to a disability but prior to having 25 years of service. However, a few years later, in 2003, the city changed its retiree health insurance policy to provide health insurance to age 65 only for retirees with 25 years of service. Employees who retired earlier due to disability would receive coverage not until age 65, as previous, but instead only for 24 months post-retirement.
Ms. Stanley retired from the city’s fire department in 2018 after developing Parkinson’s Disease. Because she did not have 25 years of service at the time she retired due to her disability, under the 2003 policy, Ms. Stanley was eligible for only 24 months of retiree health insurance, and not coverage until age 65, as would have been the case under the policy in effect in 1999 when she was hired. Ms. Stanley sued the city, claiming that its 2003 change in policy limiting health insurance coverage for disabled retirees to 24 months from the prior policy in effect at the time of her hire which provided coverage until age 65 for disabled retirees regardless of years of service, discriminated against her on the basis of her disability in violation of the ADA.
Writing for the majority – only Justice Jackson dissented from the essential holding of the case – Justice Gorsuch explained that Ms. Stanley could not maintain her ADA claim against the city because the ADA only permits “qualified individuals” – those who held and could perform the essential functions of a position at the time of the alleged discriminatory act – to bring suit. Because Ms. Stanley was no longer working for the city nor able to perform the essential functions of her position when she sued the city, the Court explained that she was not covered by the ADA’s anti-discrimination provision, the plain language of which protects only current employees from disability-based discrimination. The Court did note, however, that although Ms. Stanley could not bring her ADA claim, other statutes, including the Rehabilitation Act and state law, may afford alternative avenues for relief.
In light of Stanley, those employers who provide retiree benefits now have more clarity that making changes to benefits that may negatively impact disabled retirees will not violate the ADA. But, as noted, that does not mean that such changes will necessarily be entirely lawful, as other laws may provide protection to disabled retirees or otherwise limit what sort of changes an employer can make in retiree benefit policies, programs, and plans.
Democratic Commissioners Reinstated at CPSC – for Now
As legal challenges continue regarding whether the President of the United States can terminate confirmed commissioners at a variety of “independent” agencies without cause, eyes turn to the Consumer Product Safety Commission (CPSC or Commission). In short, after challenging their firing by President Trump in court, the three Democratic CPSC commissioners are now back at their desks. On June 13, 2025, Judge Matthew Maddox of the Maryland District Court ruled that the firing violated federal law and ordered the commissioners’ immediate reinstatement. Siding with the plaintiffs, Judge Maddox held that “President Donald J. Trump’s purported termination of Plaintiffs Mary Boyle, Alexander Hoehn-Saric, and Richard Trumka Jr. from their roles as Commissioners of the Consumer Product Safety Commission … is ultra vires, contrary to law, and without legal effect.”
Having been restored to their positions at the CPSC, Commissioners Boyle, Hoehn-Saric, and Trumka have responded to actions taken by their Republican colleagues, Acting Chair Peter Feldman and Commissioner Douglas Dziak, during their absence. At the outset, they contend that because their firings were invalid, quorum requirements under 15 U.S.C. § 2053(d) were not met, and, therefore, any votes taken since their termination are invalid. For example, a June 17, 2025, “Time Critical Ballot” overturned the May 13, 2025, vote to withdraw a Notice of Proposed Rulemaking proposing a new safety standard for lithium-ion batteries in e-mobility devices, which we wrote about here and here. The three reinstated commissioners also voted to terminate “staff who have been hired, detailed, or otherwise placed at CPSC for the express purpose of carrying out Implementing The President’s ‘Department Of Government Efficiency’ Cost Efficiency Initiative Executive Order without majority approval by the full Commission.” Acting Chair Feldman and Commissioner Dziak abstained.
The Administration promptly appealed the District Court’s decision to the Fourth Circuit and then asked both the Fourth Circuit and the District Court to pause the District Court’s order reinstating the three Democratic commissioners, pending the appeal. Unsurprisingly, the reinstated commissioners opposed the stay request. On June 23, 2025, Judge Maddox denied (Pacer subscription required) the motion before him, while the motion for a stay before the Fourth Circuit is now fully briefed and ripe for a decision.
Both parties cited the May 22, 2025, emergency order issued by the Supreme Court in Trump v. Wilcox in support of their position. In Wilcox, the Supreme Court determined that a stay of a preliminary injunction reinstating terminated federal officers (in that case, involving officials of the National Labor Relations Board) was “appropriate to avoid the disruptive effect of the repeated removal and reinstatement of officers during the pendency of this litigation.” Unlike the preliminary posture of that case, however, the District Court in the present CPSC case issued a permanent injunction reinstating the commissioners. Thus, according to Judge Maddox, the risk of disruption from “repeated removal and reinstatement” is “no longer a factor.” As the dissenting Justices in Wilcox recognized, the emergency order in that case calls into serious doubt the continued validity of a 90-year-old Supreme Court precedent, Humphry’s Executor v. U.S., which generally held that Congress has power to create independent agencies, such as the CPSC, and forbids the Executive to remove independent agency members except for cause.
The central legal question regarding the President’s authority under the Constitution to terminate officers of federal agencies with or without cause is expected to eventually land before the Supreme Court as this and other challenges to federal agency terminations continue. While the future of Humphry’s Executor remains uncertain, all eyes are now on the Fourth Circuit to see whether the three CPSC Democratic commissioners will remain in their positions.
Supreme Court Nixes Retiree’s ADA Benefits Suit
In Stanley v. City of Sanford, Florida, the U.S. Supreme Court held a disabled former employee who neither “holds” nor “desires” a job is not a “qualified individual” under the ADA and, thus, cannot sue for disability discrimination following her employer’s revocation of retiree health benefits.
The plaintiff, Karyn Stanley, was a firefighter for the City of Sanford, Florida (“City”) who retired after she was diagnosed with Parkinson’s disease. When she joined the fire department, disabled retirees received free health insurance until they were 65 years old. While employed and unbeknownst to her, the benefit changed and disabled retirees were eligible for two years of coverage. Following her retirement, the plaintiff learned of the benefit change and received the two years of health insurance coverage.
Stanley, post-retirement, filed a lawsuit against the City alleging that the City violated the ADA and discriminated against her as a disabled retiree when it altered the health insurance plan. The district court dismissed her ADA claim. On appeal, the Eleventh Circuit affirmed, holding that, because Stanley had retired, she could not bring such a suit under the plain language of the statute. The Eleventh Circuit’s decision fell in line with three other circuits (Sixth, Seventh, and Ninth), while two other circuits (Second and Third) held that the ADA’s text is ambiguous and construed the statute in favor of employees.
The Court granted certiorari to determine “whether a retired employee who does not hold or seek a job is a ‘qualified individual.’” In a 7-2 opinion authored by Justice Gorsuch, the Court held that the plain language of the statute protects only “qualified individuals,” which is defined by the statute as those “who, with or without reasonable accommodation, can perform the essential functions of the employment position that [she] holds or desires.” The Court found that the present tense usage of “holds” and “desires” signals that the statute does not reach retirees. The Court found that other ADA provisions governing qualification standards and employment tests similarly convey that the statute “focus [is] on current and prospective employees—not retirees.” The Court also found it notable that the ADA’s retaliation provision protects “any individual,” and thus “different language in these two provisions strongly suggests that [Congress] meant for them to work differently.”
Rejecting arguments from the dissent that the “qualified individual” language could not have been meant to apply to retirees, the majority held that “we do not usually pick a conceivable-but-convoluted interpretation over the ordinary one.” The Court added: “we cannot say Title I’s textual limitations necessarily clash with the ADA’s broader purposes . . . . If Congress wishes to extend Title I to reach retirees like Ms. Stanley, it can.”
The last section of Gorsuch’s opinion was adopted by a four-justice plurality of the Court in which Gorsuch lost support from Justices Roberts, Thomas, Kavanaugh, and Barrett, but added support from dissenting Justice Sotomayor. The plurality addressed an additional question raised by Stanley in her merits briefing. While the Court admitted that it “ordinarily . . . rejects attempts to inject ‘an entirely new question at the merits stage,’” the plurality made “an exception in this case.” In short, the plurality explored potential avenues for retirees, like Stanley, to pursue similar ADA claims, but ultimately held that none provided relief to Stanley in the present procedural posture.
A key takeaway from Stanley is that a majority of the Court supports a textualist interpretation of the ADA even when an argument can be made that such an interpretation clashes with the broader purposes of the ADA.
OIG Says Medical Device Company’s Proposal to Pay for Exclusion Screening for Customers May Violate the Anti-Kickback Statute
On June 20, 2025, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued an unfavorable advisory opinion – OIG Advisory Opinion 25-04 (“AO 25-04”).
AO 25-04 discusses a proposal by a medical device company (the “Requestor”) to cover the costs for its customers—hospitals, health systems, and ambulatory surgery centers—to have a third-party company screen and monitor the Requestor for exclusion from federal healthcare programs. The OIG concluded that the proposed arrangement would potentially generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”).
According to the advisory opinion, some of the Requestor’s customers were either requesting or requiring, as a condition of doing business, that the Requestor pay a third-party company (the “Company”) to screen and monitor them for exclusion from federal healthcare programs. Under the proposed arrangement, the Company would charge the Requestor (and not its customers) an annual subscription fee for each customer receiving these screening and monitoring reports. The Requestor estimated this would amount to approximately $450,000 in annual fees, paid directly to the Company. The Requestor would not be a party to any agreements between its customers and the Company.
In reviewing the proposed arrangement in AO 25-04, the OIG determined that the Requestor’s proposed payment of the exclusion screening fees on behalf of its customers would implicate the AKS because the Requestor would be paying for the costs associated with a service—exclusion screening and monitoring—that its customers would otherwise incur. This payment constitutes remuneration to those customers. The OIG explained that by relieving customers of this financial burden, the proposed arrangement could induce them to purchase items or services from the Requestor that are reimbursable by a federal healthcare program. According to the OIG, the proposed arrangement “presents anti-competitive risks and risks of inappropriate steering.” Specifically, the OIG noted concern that paying the fees on a per-customer basis could improperly sway customers toward the Requestor, especially over competitors unwilling or unable to offer similar payments. In support of the unfavorable decision, the advisory opinion notes the OIG’s “longstanding and continuing concerns” about the provision of free items or services by individuals and entities, including device manufacturers, to referral sources.
While the OIG noted that a different fact pattern or structure to the arrangement might have resulted in a favorable opinion, here, with these facts – including the per-customer fee structure, the OIG cited its concern about the potential for the Company to act as a “gatekeeper” of referrals. Because customers have conditioned their business on the Requestor’s payment of the Company’s fees for exclusion screening and monitoring, the OIG noted the risk that the Requestor would pay the fees to gain access to those referrals.
We typically see hospitals and health systems as the entities performing the exclusion screening of potential vendors before entering into a contract with a vendor. In the proposed arrangement in AO 25-04, the script is flipped, with customers (i.e., hospitals, health systems, and ASCs) requiring that the medical device company from which they’re proposing to purchase items engage a third party to screen and monitor the medical device company for potential exclusion and submit reports to those customers regarding the results of such screening and monitoring.
While the OIG concedes in a footnote to AO 25-04 that there is no statutory or regulatory requirement to perform exclusion screening, the OIG’s position is that screening employees and contractors each month best minimizes potential overpayment and civil monetary penalty (“CMP”) liability. Historically, the OIG has cautioned against relying on a third party to determine whether an individual or entity is excluded and warned that a healthcare provider may still be responsible for overpayments and CMPs relating to items or services that have been ordered, prescribed, or furnished by excluded individuals or entities. However, the OIG also noted in the 2013 Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs that a healthcare provider may be able to “reduce or eliminate its CMP liability” in such situations if the healthcare provider “is able to demonstrate that it reasonably relied on the [other entity] to perform a check of the [OIG’s List of Excluded Individuals and Entities (“LEIE”)] and “exercised due diligence in ensuring that the [other entity] was meeting its contractual obligation.” One can only assume that it was the fact that customers were conditioning business on the medical device company paying the Company on a per-customer basis to do the exclusion screening and monitoring that tipped the scale to an unfavorable opinion here.
This advisory opinion serves as a reminder that any arrangement where a provider or supplier pays for services or costs that would otherwise be the responsibility of a referral source requires scrutiny under the AKS. If one purpose of the payment is to induce referrals or purchases of items and services reimbursable by federal healthcare programs, the arrangement may violate the AKS.
Best Practices When Taking Voluntary Compliance Steps Using Workforce Analytics
The Trump administration has decisively shifted its approach to enforcing employment discrimination laws, leaving employers grappling for clarity and stability to inform their efforts to prevent and manage legal risks stemming from harassment and discrimination. Workforce analytics, accompanied by privileged legal advice tethered to risk tolerance, can assist employers to identify and address potential workplace discrimination issues minimizing legal risk amid the administration’s shifting enforcement priorities.
Quick Hits
The Trump administration has sought to end both federal enforcement of antidiscrimination laws based on disparate impact theories and to eliminate employer DEI programs.
Even with these shifting priorities, it remains critically important for employers to collect and study applicant and employee demographic data to maintain compliance with equal opportunity and antidiscrimination laws, as well as to be prepared for scrutiny under the Trump administration’s shifting policies.
Employers may want to consider proactive collection and analysis of workforce demographic data, barrier analyses, and enhanced training programs to ensure compliance with equal employment opportunity and antidiscrimination laws.
The administration—largely through the issuance of executive orders (EO)—has prioritized merit-based opportunity, sought to end usage of disparate impact theories of discrimination, rescinded federal contractor obligations to provide affirmative action and discrimination protections for women and minorities, sought to eliminate “illegal” diversity, equity, and inclusion (DEI) initiatives, and focused on stopping anti-American and anti-Christian bias and combating antisemitism. The Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor (DOL), and the U.S. Department of Justice (DOJ) have all taken actions to advance the Trump administration’s policy objectives, but questions remain.
In particular, the Trump administration’s focus on discouraging the collection of applicant data related to race, ethnicity, and sex, coupled with its messaging on unlawful race and sex discrimination in DEI programs, has many employers hesitant to collect, maintain, and analyze demographic information from their applicants and employees.
This legal landscape is especially confusing for federal contractors given the wind down of EO 11246 obligations, but the administration’s new focus impacts all employers. As a result, employers face challenges complying with legal obligations and effectively managing risks associated with workplace discrimination and harassment.
However, a close review of the EEOC’s Fiscal Year 2026 Congressional Budget Justification submitted to Congress in May 2025 reveals that EEOC investigations will continue to focus on employer data. According to the budget justification, the EEOC is committed to educating and informing its own staff to “combat systemic harassment, eliminate barriers in hiring and recruitment, recognize potential patterns of discrimination, and examine and analyze these often large or complex investigations effectively.” The agency said that in fiscal year (FY) FY2026, it plans to “conduct mid and advanced level training for field staff and assist with the development of class investigations, data requests, and data analysis for pattern and practice disparate treatment cases.” (emphasis added).
The EEOC’s characterization of budget funds sought for its litigation program is also instructive. As of March 31, 2025, 46 percent of the EEOC’s litigation docket involved systemic discrimination or class lawsuits. Citing efforts to enforce EO 14173, the Commission contemplates involving “expert witnesses” and “the discovery of large-scale selection data to prove the existence and extent of a pattern or practice of discrimination.” The Commission justifies its resource request “to remedy discrimination on prioritized issues,” and argues aggressive enforcement will result in “a strong incentive for voluntary compliance” by employers.
Shifting Enforcement Targets
Employers may see an increase in EEOC charges from charging parties and Commissioner’s as well as other enforcement activities that align with the current administration’s priorities, including enforcement regarding DEI programs, so-called anti-American bias, national origin discrimination, and anti-Semitism. As just one example, the EEOC recently settled a systemic investigation into national origin and anti-American bias for $1.4 million dollars.
EEOC Acting Chair Andrea Lucas has repeatedly warned employers that EEOC focus will be on intentional disparate treatment cases where there has been a “pattern or practice” of discrimination. Like disparate impact, “pattern or practice” claims are rooted in systemic issues and typically involve the use of statistical evidence related to allegedly aggrieved individuals.
The 2024 Supreme Court decision in Muldrow v. City of St. Louis (rejecting a heightened bar for alleging an employment decision or policy resulted in an adverse impact on terms and conditions of employment) and the 2025 decision in Ames v. Ohio Department of Youth Services (rejecting a higher evidentiary standard for employees from majority groups to prove employment discrimination), have made it easier for plaintiffs to plead and prove employment discrimination claims under Title VII. The decisions seemed to have widened the doorway for more claims from individuals from majority groups (so-called reverse discrimination claims) and potentially made it easier to evade summary judgment and reach a jury trial if litigation ensues.
Moreover, federal contractors, institutions relying on federal contracts or grants, and federal money recipients face additional concerns with False Claims Act (FCA) liability. President Trump’s EO 14173, which seeks to require entities to certify for purposes of the FCA that they do not maintain unlawful discriminatory policies, namely illegal DEI policies. The DOJ has launched an initiative to use the FCA to investigate civil rights violations committed by federal fund recipients, expanding legal exposure to such employers.
Proactive Steps
Given the current legal landscape, employers may want to take proactive steps to ensure compliance with equal employment opportunity and antidiscrimination laws. These steps may include:
Collect and Analyze Demographic Data: Collecting and analyzing demographic data can be crucial for identifying and addressing disparities within the workplace and for documenting and demonstrating reasons for employment decisions or policies. While there may be concerns about collecting demographic data, such concerns may be alleviated by keeping data confidential and analyzing it under attorney-client privilege.
Barrier Analysis: Barrier analysis involves identifying and addressing obstacles that may prevent equal employment opportunities. This can include reviewing hiring practices, promotion policies, and other employment decisions that cover all aspects of the employment life cycle to ensure they do not disproportionately impact certain groups. By conducting a thorough barrier analysis, employers can proactively address potential issues before they become legal problems and remove barriers.
Review and Update Policies: Regular reviews of and updates to employers’ antidiscrimination and harassment policies can help ensure they align with current laws and the administration’s priorities, as well as employers’ values, goals, and objectives. Such reviews may include policies related to DEI, national origin discrimination, and anti-Semitism.
Provide Training: Implementing regular training programs for company leaders, managers, and employees on new antidiscrimination enforcement developments can help prevent discriminatory behavior and ensure that all employees understand their rights and responsibilities. Updating modules and examples to reflect changing priorities may help employers remain compliant. Likewise, covering a wide variety of scenarios and examples, including majority characteristics, can be important to review and include.
Next Steps
The shifting landscape of employment law presents both challenges and opportunities for employers. To be prepared, employers can stay informed on the latest actions and consider which proactive steps may be best to avoid potential liability and achieve their goals and objectives.
Big Sky State Makes Big Privacy Updates
Montana’s privacy law has received a refresh and updates will go into effect October 1, 2025 – exactly one year since the law took effect. The law was modified with SB 297, and changes include coverage, approach with minors, and more:
Broadening who is covered. Previously, Montana’s privacy law applied only to those controlling or processing the personal data of at least 50,000 Montanans. SB 297 cuts those numbers in half, bringing in any business handling the data of just 25,000 state residents or making substantial revenues off the personal data of at least 15,000 people.
Minors. As amended, businesses offering online services, products, or features to those under 18 must use reasonable care to avoid heightened risks of harm to minors. Data protection impact assessments -will also be needed if engaging in activities that might create a risk of harm to minors. As revised, companies will need to get consent from those 13-18, or from their parents if the minor is under 13, to process minors’ information for targeted advertising, certain profiling activities, or selling of personal data. There are also restrictions on geolocation information collection and using “system design feature[s]” to increase use of online services.
Narrowed exemptions. Montana has removed the broad GLBA entity-level exemption that exists in most states (joining California, Minnesota, and Oregon). There will still be an exemption for GLBA-covered information, but the only types of financial institutions that receive the entity-level exception are banks and credit unions. Montana’s law also previously exempted non-profits, but now narrows this to only non-profits that detect and prevent fraudulent acts in connection with insurance. Delaware and Oregon’s privacy laws contain similar carveouts for non-profits.
Privacy policy updates. Under the law’s revisions, privacy policies will need to explain what rights consumers have (not just that the consumer has rights) and the types of data and third parties to whom data is shared or sold. Like California, Colorado, Minnesota, and New Jersey, Montana businesses must also state the date the privacy notice was “last updated.” Privacy notice content will need to be accessible to individuals with disabilities and available in each language in which the business provides a product or service. Links to the notices must be conspicuously posted. Material changes must communicated to consumers for prospective data collection and they must be allowed to opt out of such changes.
AG and right to cure. Finally, as amended, businesses will no longer have a statutory cure period. Previously, when the AG issued a notice of violation, businesses were given 60 days to cure.
Putting it into Practice: Montana joins California, Colorado, and Virginia in making changes to its comprehensive privacy laws. Provisions to keep in mind include privacy policy content, approach with minors’ information, and who and what is covered under the law.
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