FHFA Rescinds UDAP Oversight Bulletin and SPCP-Based Renter Protections
The Federal Housing Finance Agency (FHFA) has taken two significant deregulatory steps affecting its oversight of the government-sponsored enterprises, Fannie Mae and Freddie Mac (GSEs). The agency rescinded a 2024 advisory bulletin asserting its authority to regulate unfair or deceptive acts or practices (UDAP) by Fannie Mae and Freddie Mac. Additionally, the FHFA withdrew renter protection requirements—previously scheduled to take effect on May 31—for multifamily loans made through Special Purpose Credit Programs (SPCPs) backed by the GSEs.
UDAP Advisory Bulletin Rescinded
FHFA stated that enforcement of unfair or deceptive acts or practices should remain with the FTC, which is the primary administrator of Section 5 of the FTC Act. The agency emphasized its focus on the safety and soundness of the GSEs, rather than duplicating existing consumer protection authority.
The rescinded bulletin had stated that FHFA would evaluate whether the GSE’s actions or inactions could be considered unfair or deceptive under established standards, and would hold the enterprises accountable if they facilitated or failed to prevent such conduct. It also emphasized UDAP concerns could arise in connection with third-party servicers or counterparties acting on behalf of GSEs. By revoking the bulletin, FHFA clarified that it does not intend to impose separate or parallel UDAP obligations on the enterprises beyond those enforced by the FTC or CFPB.
SPCP-Based Tenant Protections Withdrawn
FHFA has formally reversed course on renter protections that were previously tied to multifamily loans issued through SPCPs backed by GSEs. These conditions, which had been scheduled to take effect on May 31, would have required landlords to implement a five-day grace period before charging late fees and to provide at least thirty days’ notice before modifying lease terms.
The protections were introduced as part of the GSEs’ Equitable Housing Finance Plans and were aimed at improving housing stability for very low-, low-, and moderate-income renters. FHFA’s current leadership characterized the requirements as exceeding the agency’s role and stated that lease-related protections should be governed by state and local law.
Putting It Into Practice: The FHFA’s recission of its UDAP bulletin and SPCP-based renter protections reflects a shift toward a narrower role for the agency, centered on institutional supervision and market stability. Financial institutions should continue look to the FTC, CFPB, and state regulators for UDAP enforcement, tenant protection standards, and other consumer-facing compliance obligations.
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PTAB Unveils Updated Practices for Proceedings
The USPTO’s Patent Trial and Appeal Board (PTAB) policy shifts demand and heightens strategic awareness. Clients are reminded that they must continue to align their PTAB and litigation efforts, leveraging timing, venue insights and tailored arguments to maximize their chances of success in this evolved landscape. These recent policy changes by the U.S. Patent and Trademark Office (USPTO) have significantly impacted discretionary denials and briefing procedures in PTAB cases.
Rescission of Prior Guidance on Discretionary Denials
On February 28, 2025, the USPTO rescinded the June 21, 2022, memorandum titled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation.” This action restores the PTAB’s reliance on precedential decisions such as Apple Inc. v. Fintiv, Inc. and Sotera Wireless, Inc. v. Masimo Corp. for guidance on discretionary denials.
Updated Guidance from Chief Administrative Patent Judge Boalick
Following the rescission, on March 24, 2025, Chief Administrative Patent Judge Scott R. Boalick issued a memorandum providing further direction:
Application Scope: The rescission applies to cases where the PTAB has not issued an institution decision or where a request for rehearing or Director Review is pending. The PTAB will consider timely requests for additional briefing on the rescission’s application on a case-by-case basis.
Fintiv Analysis Adjustments: The PTAB will continue applying the Fintiv factors, with notable clarifications.
ITC Proceedings: The Board is more likely to deny institution if the International Trade Commission’s (ITC) projected final determination date precedes the PTAB’s deadline for a final written decision. Conversely, if the ITC’s determination date is after the PTAB’s deadline, discretionary denial is less likely.
Sotera Stipulations: A timely filed Sotera stipulation remains highly relevant but is not dispositive in the discretionary denial analysis.
Merits of the Petition: The strength of the inter partes review (IPR) challenge’s merits will be evaluated within the Fintiv analysis but will not be solely determinative.
PTAB’s New Interim Workload Management Processes and Potential Budget Implications
On March 26, 2025, the USPTO introduces short-term strategies for the PTAB to manage backlogs and optimize judicial resources so that the PTAB can continue its work of adjudicated ex parte patent appeals and inter partes review proceedings. These measures that take effect on April 1, are described as “temporary in nature” and will remain in place until at least October 1, 2025. Although the memo does not explicitly mention budget cuts, its emphasis on shifting certain pre-institution tasks to non-Administrative Patent Judge (APJ) staff and prioritizing cases may be reflectively of broader federal efficiency efforts. These changes could be the result of budget reductions for the USPTO resulting from efforts by the Department of Government Efficiency (DOGE), which has discussed trying to achieve a 10–15% cut to the workforce across all federal agencies.
Key Points:
Resource Reallocation: Pre-institution tasks (like petition reviews) will be handled more often by non APJ staff, reducing APJ involvement at early stages.
Potential Backlog Effects: With roughly 1,500+ annual inter partes and post-grant proceedings, fewer APJs or hiring freezes could exacerbate existing backlogs.
Limits inter partes review: Adds additional non-merits briefing to the inter partes review process that could limit the total number of inter partes review proceeding instituted.
Timeline: This six-month window aligns with the federal fiscal year reset on October 1, hinting that the USPTO might anticipate further changes (either potential relief or deeper cuts) at that time.
New Briefing Procedures for Discretionary Denials
To enhance efficiency and consistency, the USPTO has implemented interim processes for discretionary denial briefing:
Separate Briefing Schedule: Patent owners may file a brief outlining bases for discretionary denial within two months of the PTAB’s Notice of Filing Date Accorded to a petition. Petitioners can file an opposition brief within one month of the patent owner’s brief. Leave to file further briefing may be permitted for good cause.
Word Limits: Consistent with 37 C.F.R. § 42.24, discretionary denial briefs are limited to 14,000 words and reply briefs to 5,600 words.
Recent Guidance on PTAB Hearings
Effective March 14, 2025, PTAB judges conducting virtual hearings will appear from a PTAB hearing room at a USPTO office, absent special circumstances. Parties are encouraged to participate in person when possible but those who have scheduled virtual hearings may continue to appear virtually. The public is also encouraged to observe hearings in person but remote public access for virtual hearings remains available upon request.
Implications for Practice
Parallel Proceedings: Assess the timelines and statuses of parallel district court or ITC proceedings, as these factors significantly influence the PTAB’s discretionary decisions.
Sotera Stipulations: While still influential, Sotera stipulations should be part of a comprehensive strategy rather than a standalone solution to avoid discretionary denial.
Evidence Submission: Provide detailed evidence regarding the expected resolution timelines of parallel proceedings to strengthen arguments against discretionary denial.
Polsinelli will continue monitoring these developments and inform you of any significant changes. Please contact us with questions about how these interim measures may affect your PTAB proceedings.
Sources:
USPTO Rescinds Memorandum Addressing Discretionary Denial Procedures: https://www.uspto.gov/about-us/news-updates/uspto-rescinds-memorandum-addressing-discretionary-denial-procedures?utm_source=chatgpt.com
Guidance on USPTO’s Recission of “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation”: https://www.uspto.gov/sites/default/files/documents/guidance_memo_on_interim_procedure_recission_20250324.pdf?utm_source=chatgpt.com
Interim Processes for PTAB Workload Management (March 26, 2025): https://www.uspto.gov/sites/default/files/documents/InterimProcesses-PTABWorkloadMgmt-20250326.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=
USCIS Begins Announcing H-1B Registration Selections for FY 2026
U.S. Citizenship and Immigration Services (USCIS) has begun notifying petitioners of selected registrations for this year’s H-1B cap lottery. This marks a pivotal step in the FY 2026 H-1B visa process, as registrants who have been selected are now eligible to proceed with filing their H-1B cap-subject petitions on April 1 (earliest date).
The H-1B program remains one of the most sought-after avenues for U.S. employers to hire highly skilled foreign professionals in specialized fields such as technology, engineering, health care, and others. This year’s process follows the electronic registration system implemented by USCIS, which streamlines the initial stage of the H-1B lottery by allowing employers to submit registrations electronically for a chance to be considered in the cap selection.
For those whose registrations have been selected, the next step is to prepare and submit a complete H-1B petition to USCIS within the designated filing period. Petitioners are encouraged to ensure that all required documentation is accurate and submitted in a timely manner to avoid delays or denials.
For those whose registrations were not selected, USCIS may hold additional lotteries if the agency determines that it has not received enough petitions to meet the annual H-1B cap. Petitioners should monitor updates from USCIS in the coming months.
Employers and registrants may review their accounts on the USCIS online portal to check the status of their registrations. Notifications of selection are being issued electronically, and selected registrants will see their status updated to “Selected.” Those who have not been selected will see a status of “Not Selected” once the selection period has concluded.
The H-1B visa process is an opportunity for U.S. employers to address skills gaps and access global talent, but it is also a highly competitive process. Those with questions about preparing a petition or navigating next steps should consider consulting with an experienced immigration attorney or advisor to ensure compliance and maximize their chances of success.
For more information about the H-1B program and updates from USCIS, visit the official USCIS H-1B Cap Season webpage.
SEC Abandons Climate Disclosure Rule
As expected, the SEC under the Trump Administration has abandoned the climate disclosure rule promulgated by the Biden Administration. Specifically, as stated in a court filing today, “the Commission has determined that it wishes to withdraw its defense of the Rules.” Further, the SEC has also informed the court that “Commission counsel is no longer authorized to advance the arguments presented in the Commission’s response brief.”
This decision by the SEC was widely anticipated–and, indeed, had previously been telegraphed by the Republican appointees at the SEC. It is significant nonetheless, as this reversal by the SEC not only provides further evidence of a withdrawal from the climate policies propounded by the Biden Administration but renders the rule less likely to survive legal challenge–and even less likely to be the subject of enforcement action should the courts uphold the rule.
Still, this is not the end of the litigation over the SEC rule. A number of states had intervened in defense of the rule (AZ, CO, CT, DE, DC, HI, IL, MD, MA, MI, MN, NV, NM, NY, OR, RI, VT, WA), and these states can continue to present arguments on behalf of the climate disclosure regulation to the Eighth Circuit. However, the odds that the climate disclosure regulation survives legal challenge when the SEC itself has abandoned it appear quite low.
The SEC will stop defending corporate emissions reporting requirements in court after the agency under President Joe Biden fought for months to save the rules. Securities and Exchange Commission lawyers are “no longer authorized to advance” arguments the agency had made in support of the 2024 regulations that require companies to report their greenhouse gas emissions, the SEC said in a filing with the US Court of Appeals for the Eighth Circuit on Thursday.
news.bloomberglaw.com/…
RIP Overdraft Rule?
Last month, bills were introduced in the House and Senate to overturn the much-maligned CFPB overdraft rule. You can find our previous write-up on the rule here. The rule would redefine “finance charge” under Regulation Z to sweep up overdraft fees charged by “Very Large Financial Institutions” (total assets exceeding $10 billion). Unless covered entities charged a “breakeven” fee (calculated through a head-spinning formula) or a “benchmark” fee ($5), they would have to treat overdraft fees as an extension of credit under the Truth in Lending Act (i.e., issue a bunch of onerous disclosures).
The rule was questioned when it came out in January 2024—an issue we previously addressed. Several banks ran to court as soon as the final rule was promulgated in December 2024. As we explained, the rule carried potentially drastic consequences that would create exposure beyond overdraft fees and beyond Very Large Financial Institutions.
When former CFPB Director Rohit Chopra unveiled this rule at the beginning of an election year, he probably didn’t anticipate a Republican sweep of Congress and the White House. But, given November’s results, yesterday’s outcome shouldn’t be a surprise: The Senate voted 52-48 to eliminate the overdraft rule pursuant to the Congressional Review Act (5 U.S.C. § 801). If the companion measure passes the House, the matter will go to President Trump’s desk for his signature. If both of those things happen, the overdraft rule cannot be resurrected again except by an act of Congress.
That’s what we expect to happen. But it’s not certain. Overdraft fees may draw the ire of populist elements within the Republican Party. Note that Sen. Josh Hawley broke rank to vote against the measure.
Stay tuned. We’ll keep track of this issue.
Nebraska Considers Sales Tax on Candy and Soft Drinks
Earlier this year lawmakers in Nebraska proposed a bill (LB170) which would end the state’s sales tax exemption for soda and candy. Currently, all food and beverages except prepared foods and vending machine items are exempt from the sales tax.
The proposed bill defines candy as a “preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces” but excludes “any preparation that contains flour or that requires refrigeration” to avoid discouraging consumption of healthier snacks like granola and protein bars. (See Deep Dive: Nebraska Legislature committee to discuss ‘Sugar Tax’). Soft drinks are defined as “nonalcoholic beverages that contain natural or artificial sweeteners” but excludes “beverages that contain milk or milk products, soy, rice, or similar milk substitutes or that contain greater than fifty percent of vegetable or fruit juice by volume.”
The bill is intended to reduce the state’s budget deficit. It is opposed by affected industry including the Nebraska Beverage Association.
A TALE OF TWO REJECTED MOTIONS: Court Denies Plaintiff’s Motion for Leave to Amend and Defendant’s Motion to Compel
Hey, TCPAWorld!
Be timely. Don’t skip procedural steps. And always bring receipts.
In SHANAHAN v. MFS SUPPLY LLC, No. 8:23CV475, 2025 WL 885265 (D. Neb. Mar. 21, 2025), both Terrence Shanahan (“Plaintiff”) and MFS Supply LLC, (“Defendant”) filed competing motions. Plaintiff filed a Motion for Leave to Modify the First Amended Class Action Complaint and Case Progression Order, aiming to revise the class definition based on new facts uncovered during discovery. Meanwhile, the Defendant filed a Motion to Compel, to Deem Admissions Admitted, and to Enlarge the Number of Interrogatories, requesting the Court to force Plaintiff to respond to discovery requests.
The Court denied both motions.
Background
On October 27, 2023, Plaintiff filed a class action complaint accusing Defendant of sending unsolicited telemarketing texts to consumers on the national Do Not Call Registry (DNC). Plaintiff claims he received two such texts promoting real estate lockboxes and asserts he never gave consent, with his number registered on the DNC since December 17, 2004.
Plaintiff seeks to represent the following class:
“All persons in the United States who: (1) from the last 4 years to present (2) Defendant texted more than once in a 12-month period (3) whose telephone numbers were registered on the Federal Do Not Call registry for more than 30 days at the time the texts were sent.” (Filing No. 1 at p. 4 ). Plaintiff’s Complaint contains one cause of action for violations of 47 U.S.C. § 227(c) by telemarketing to telephone numbers listed on the Federal Government’s National Do Not Call Registry.”
Id. at *2. Plaintiff asserts a single cause of action, alleging that the Defendant violated 47 U.S.C. § 227(c) by making telemarketing calls to phone numbers registered on the National Do Not Call Registry.
Defendant filed an answer broadly denying Plaintiff’s allegations and asserting multiple affirmative defenses, including statutory exclusions and claims that Plaintiff and the putative class consented—either expressly or implicitly—to receiving the messages, among others.
Following the parties’ Rule 26(f) Report, the Court set June 24, 2024, as the deadline for written discovery and July 8, 2024, as the deadline to file a motion to compel. The Case Progression Order required parties to first contact the magistrate judge and receive authorization from the Court before filing a motion to compel.
Discovery
On February 7, 2024, Defendant served discovery requests and later deposed Plaintiff on May 6, revealing new information allegedly not disclosed in prior cases, including that Plaintiff’s phone number was tied to his real estate license and business since 2006. Then on May 8, 2024, Defendant served a second set of discovery requests, which Plaintiff largely objected to as exceeding the interrogatory limit under Rule 33(a), being irrelevant, burdensome, vague, ambiguous, among other objections. After receiving Plaintiff’s responses, the parties engaged in an exchange that would entertain—or agitate—any litigator, and according to the Court, went something like this:
Defense counsel: “These are late.”
Plaintiff’s counsel: “No they’re not.”
Defense counsel: “The admissions were due on the 7th. You are late on the admissions. The remainder of the responses are woefully inadequate…”
Plaintiff’s counsel: “Thank you for your professional courtesy in waiting one day. The requests were all overly broad.”
Defense counsel: No response.
Id. at * 2-3.
Counsel informed the Court of a dispute over whether Plaintiff should be allowed to conduct class discovery, and shortly before the conference, Plaintiff moved to amend the Complaint. During the June 17, 2024, conference, the Court directed Plaintiff to file an amended motion after finding no good cause for missing the amendment deadline under Rule 16(b). Further, the Court declined to grant class discovery or allow a motion to compel, instead directing the parties to resolve the issues through further meet-and-confer efforts.
On June 26, 2024, Plaintiff filed an amended motion to amend the complaint, seeking to revise the class definition and establish standing based on information learned during Defendant’s deposition which revealed that Defendant had sent approximately 34,000 text messages to a nationwide list that included Plaintiff. Plaintiff sought to add the following allegations to his Complaint:
“Defendant obtained Plaintiff’s information when it downloaded a nationwide list of 17,000 (Seventeen Thousand) Berkshire Hathaway Ambassador real estate agents. Plaintiff was unaware and had no knowledge that Defendant obtained Plaintiff’s information. Defendant uploaded the list to Textedly, a text messaging platform, and sent out two text messages soliciting one of its popular products (lockboxes, which are locked boxes for keys that realtors share).
Plaintiff’s phone number ending in 1146 is Plaintiff’s only residential phone number, and Plaintiff does not have a ‘landline.’
Plaintiff’s phone number ending in 1146 is his personal cell phone.
Plaintiff owns a real estate business and maintains four separate phone numbers ending in 6224, 0737, 6430 and 0366 for operational purposes so that people do not call his personal cell phone for matters dealing with routine operation of the business.”
Id. at *3. Plaintiff also sought to amend the class definition as:
“All persons in the United States who: (1) are on the list of Berkshire Hathaway Realtors obtained by MFS Supply LLC; (2) whose telephone numbers were connected to cell phones; (3) registered on the Federal Do Not Call registry; (4) whose owners do not maintain any other residential telephone numbers; and (5) do have separate telephone number(s) for business purposes.”
Id. On July 8, 2024, Defendant filed a Motion to Compel, seeking additional interrogatories and to deem admissions admitted, alleging that Plaintiff’s counsel failed to provide documents, respond to interrogatories, or meet discovery deadlines.
Court’s Analysis of the Competing Motions
The Court starts with analyzing Plaintiff’s Motion to Amend his Complaint.
Under Rule 15(a), courts should freely grant leave to amend when justice requires, but if a scheduling deadline has passed, the party must first show good cause under Rule 16(b). Because Plaintiff filed his motion to amend more than three months after the March 15, 2024 deadline set in the Court’s scheduling order, he must first show good cause.
The primary measure of good cause is the movant’s diligence in trying to meet the deadline. Courts generally do not consider prejudice if the movant was not diligent, and absent newly discovered facts or changed circumstances, delay alone is insufficient to justify amendment. The Court found Plaintiff lacked good cause, finding that the facts were not newly discovered and could have been included earlier with diligence, nor did they alter the legal basis of Plaintiff’s claims which already addressed unsolicited texts sent despite being on the Do Not Call Registry. The Court also stated that granting the amendment after discovery had closed would cause delay, require further discovery, and unfairly prejudice Defendant.
Next, the Court analyzed Defendant’s Motion to Compel.
The Court denied Defendant’s motion for failing to follow procedural requirements, including not requesting a conference with the magistrate judge as required by the Case Progression Order and Civil Case Management Practices. Defendant also failed to show proof of a proper meet and confer, such as the date, time, or attachments any related communications between the parties. Plaintiff, on the other hand, submitted email evidence demonstrating that his counsel requested to meet and confer to resolve discovery issues, however, Defendant ignored the request and instead focused on filing the instant motion.
Moreover, the Court found that even if Defendant’s procedural failures were excused, the motion to compel still lacked the required evidentiary support to challenge Plaintiff’s production or objections, as local rules require supporting evidence for motions relying on facts outside the pleadings.
Specifically, the Court denied Defendant’s request for Plaintiff to respond to its second set of interrogatories, because Defendant exceeded the 25-interrogatory limit under Rule 33(a)(1) and failed to address the merits of Plaintiff’s objections or provide the original set of interrogatories.
Defendant’s request for production was denied as Defendant did not identify which of the 29 requests were deficient or explain why Plaintiff’s objections were invalid.
Finally, the Court denied the requests for admissions. Although Plaintiff’s responses were three days late, the Court, in its discretion, treated them as a request to withdraw deemed admissions and accepted them, finding no prejudice to Defendant and no impact on the merits of the case.
Takeaways
Scheduling Orders are not mere suggestions made by the Court and parties are expected to follow them. While the Court has the discretion to approve untimely requests to amend, the movant must show good cause under Rule 16(b), supported by diligence and not rely on preexisting facts that could have been included earlier.
Further, skipping procedural steps, such as a meet-and-confer, can kill your motion before its merits are weighed.
Finally, if you’re challenging discovery responses, make sure to bring receipts. Courts want precision—not general statements.
FDIC Aims to Eliminate Reputational Risk from Supervision
On March 24, acting FDIC Chairman Travis Hill informed Congress that the agency is preparing to eliminate the use of “reputation risk” as a basis for supervisory criticism. In a letter to Rep. Dan Meuser (R-Pa.), Hill explained that the FDIC has completed a review of its regulations, guidance, and examination procedures to identify and remove references to reputational concerns in its supervisory framework.
Hill stated that the FDIC will propose a rule that ensures bank examiners do not issue supervisory findings based solely on reputational factors, which have faced criticism from lawmakers who argue the concept has been used to discourage banking relationships with lawful but politically sensitive industries.
The FDIC is also reevaluating its oversight of digital asset activities. According to Hill, the agency intends to replace a 2022 policy requiring FDIC-supervised institutions to notify the agency and obtain supervisory feedback before engaging in crypto-related activities. The new approach will aim to provide a clearer framework for banks to engage in blockchain and digital asset operations, so long as they maintain sound risk management practices. Hill noted that the FDIC is coordinating with the Treasury Department and other federal bodies to develop this updated framework.
Putting It Into Practice: This initiative closely mirrors the OCC’s recent decision to eliminate reputational risk as a factor in bank supervision (previously discussed here). Both agencies appear to be responding to criticism that reputational concerns have been used to discourage banking relationships with lawful but disfavored industries. Banks should prepare for changes in examination procedures and evaluate how these developments may impact their compliance strategies.
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McDermott+ Check-Up: March 28, 2025
THIS WEEK’S DOSE
Senate Confirms FDA, NIH Nominations, Advances CMS Nomination. The Senate confirmed US Food and Drug Administration (FDA) Commissioner Martin Makary and National Institutes of Health (NIH) Director Jayanta Bhattacharya, and the Senate Finance Committee advanced Mehmet Oz’s nomination as Centers for Medicare & Medicaid Services (CMS) administrator to the full Senate.
House Oversight Committee Discusses Government Reform Legislation. The committee advanced three bills related to government reorganization, the Federal Employees Health Benefits Program, and pandemic response.
CBO Projects US Will Reach Debt Limit in August or September 2025. The Congressional Budget Office (CBO) estimate will factor into the timing of a budget reconciliation package, as Republican leaders appear to be in agreement to include a debt limit increase in that forthcoming package.
HHS Announces Reorganization. The US Department of Health and Human Services (HHS) plans to eliminate 10,000 employees and consolidate multiple agencies.
President Trump Makes Additional Healthcare Nominations. Nominated positions include CDC director, HHS inspector general, HHS assistant secretary for health, and HHS assistant secretary for the Administration for Children and Families.
CONGRESS
Senate Confirms FDA, NIH Nominations, Advances CMS Nomination. On March 25, 2025, the Senate confirmed Martin Makary, MD, as the next FDA commissioner by a 56 – 44 vote. Sens. Durbin (D-IL), Hassan (D-NH), and Shaheen (D-NH) were the sole Democrats to vote yes, along with all Republicans. Jayanta Bhattacharya, MD, was also confirmed as the next NIH director by a 53 – 47 party line vote. The Senate Finance Committee advanced the nomination of Mehmet Oz, MD, to be CMS administrator by a 14 – 13 party line vote. Oz’s full Senate confirmation vote could be as early as next week, and he is expected to be confirmed.
House Oversight Committee Discusses Government Reform Legislation. The markup included discussion of nine bills, three of which pertained to healthcare and the federal workforce and advanced out of the committee:
H.R. 1295, the Reorganizing Government Act of 2025, would renew and extend through December 2026 the president’s authority to propose a government reorganization plan that Congress must consider via an up or down vote on a joint resolution of approval within 90 calendar days.
Passed 23 – 20 along party lines, with Republicans voting in support.
H.R. 2193, the FEHB Protection Act of 2025, would require federal agencies to verify that an employee is eligible to add a family member to their Federal Employees Health Benefits (FEHB) Program plan.
Passed 29 – 15, with support from Republicans as well as Reps. Connolly (D-VA), Lynch (D-MA), Brown (D-OH), Min (D-CA), Norton (D-DC), and Subramanyam (D-VA).
H.R. 2277, the Federal Accountability Committee for Transparency Act of 2025, would extend the Pandemic Response Accountability Committee through December 2026 and rename it the Fraud Prevention and Accountability Committee.
Passed unanimously, 44 – 0.
Links to all bills discussed during the markup can be found here.
CBO Projects US Will Reach Debt Limit in August or September 2025. The CBO “X date” projection is that the United States will default on its debt in August or September 2025 if the debt limit remains unchanged. If the government’s borrowing needs are greater than CBO projections, the debt limit could be reached as early as May or June 2025. Republicans aim to raise the debt limit as part of the reconciliation process in the coming months, but if a reconciliation package is not enacted by the X date, separate legislation may be required to raise the debt limit. Legislation outside the reconciliation process would require support from Democrats to pass. The US Department of the Treasury is expected to release its own X date estimate in May 2025.
ADMINISTRATION
HHS Announces Reorganization. In response to the executive order on the Department of Government Efficiency (DOGE) Workforce Optimization Initiative, HHS announced a “dramatic restructuring” that includes the elimination of 10,000 employees. This follows the voluntary departure of 10,000 employees that has already occurred. Taken together, these two workforce reductions will shrink HHS by 25% to 62,000 employees. The agency projects that the reorganization will save $1.8 billion and make the agency more efficient.
Major actions of the restructuring plan include:
Consolidating 28 divisions into 15, eliminating five of the 10 regional offices, and centralizing core administrative functions.
Eliminating 10,000 workers, including 3,500 employees from the FDA; 2,400 employees from the Centers for Disease Control and Prevention (CDC); 1,200 employees from the NIH; and 300 employees from CMS.
Creating a new Administration for a Healthy America subdivision, which will combine the Office of the Assistant Secretary for Health, the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration (SAMHSA), the Agency for Toxic Substances and Disease Registry, and the National Institute for Occupational Safety and Health.
Moving programs for older adults from the Administration for Community Living to other agencies, including CMS, the Assistant Secretary for Planning and Evaluation, and the Administration for Children and Families (ACF).
Read the press release here, and the fact sheet here.
President Trump Makes Additional Healthcare Nominations. After the White House abruptly withdrew Dave Weldon’s nomination for CDC director, President Trump nominated acting CDC director Susan Monarez, PhD, to be the permanent director. She previously worked as deputy director of the Advanced Research Projects Agency for Health. Additional HHS nominations include:
HHS inspector general: Thomas March Bell, general counsel for House Republicans.
HHS assistant secretary for health: Brian Christine, MD, urologist.
HHS assistant secretary for ACF: Alex Adams, director of the Idaho Department of Health and Welfare.
QUICK HITS
Senate Finance Democrats Release Report on MA Marketing Tactics. The report found that Medicare Advantage (MA) plans are increasingly using marketing strategies to enroll beneficiaries, and includes eight recommendations to increase oversight of these actions.
Senate Democrats Hold Forum on NIH Research Cuts. The forum, hosted by Sens. Baldwin (D-WI) and Welch (D-VT), featured a panel of researchers, patients, and former NIH Director Monica Bertagnolli, MD. Discussion focused on how cuts or delays of NIH research could harm cancer and Alzheimer’s research.
HHS Cancels $12 Billion in State Infectious Disease, Substance Use Grants. Congress appropriated the now-cancelled CDC and SAMHSA state grants through September 2025 during the COVID-19 pandemic. The grants focused on infectious disease tracking, mental health services, and substance use disorder treatment. House Appropriations Committee Ranking Member DeLauro (D-CT) criticized the cancellations.
Department of Justice Launches Anticompetitive Regulations Task Force. As part of the president’s deregulatory initiative, the task force aims to eliminate anticompetitive state and federal laws and regulations, including in the healthcare sector. Public comments to support the task force’s efforts are due May 26, 2025.
BIPARTISAN LEGISLATION SPOTLIGHT
The Bipartisan Senate 340B Working Group announced the addition of Sens. Kaine (D-VA), Mullin (R-OK), and Hickenlooper (D-CO). They join Sens. Moran (R-KS), Baldwin (D-WI), and Capito (R-WV). The new additions replace former Sens. Stabenow (D-MI) and Cardin (D-MD), who retired, and Sen. Thune (R-SD), who stepped back from the working group when he became Senate majority leader. Last Congress, the working group released a conceptual discussion draft and request for information on proposed changes to the 340B program. It is now completing its review of stakeholder feedback with the intention of releasing a formal legislative draft.
NEXT WEEK’S DIAGNOSIS
The House and Senate are both in session next week. Republicans will continue conversations on a reconciliation strategy, as they aim to strike a deal on a unified budget resolution before the Easter recess in mid-April. A Senate vote on a unified budget resolution could occur as early as next week, and Senate nomination hearings and confirmation votes are expected to continue. The Senate Judiciary Committee will discuss drug patent legislation. The House Energy and Commerce Committee has a busy week with a Health Subcommittee hearing on over-the-counter monograph drugs, an Oversight and Investigations Subcommittee hearing on cybersecurity vulnerabilities in legacy medical devices, and an expected full committee markup. Both the Inpatient Prospective Payment System (IPPS) proposed rule and the final rate notice for MA and Part D plans are expected in early April 2025. Read our previews for the IPPS proposed rule here and the final rate notice here.
Import-Tariffs: Acts of God or just another Thursday?
Many of us are quietly watching and waiting to see how newly imposed tariffs will affect the U.S. and global economy in the coming weeks, months, and potentially – years.[i] Anticipating these changes and protecting your transactions is going to be crucial, but what about deals that have already been negotiated and signed? Which party will bear the greater risks and burdens of tariff-related cost increases? There are several theories that may provide relief.
A widely used contract provision that will bear considerable scrutiny is the ‘Force Majeure Clause,’ which allows a party to avoid liability if it cannot fulfill its obligations due to circumstances beyond their control or unforeseen events.[ii] The motivator behind this provision is to protect parties against defined disasters, calamities, and acts (and wraths) of God.[iii] Numerous courts have considered such clauses, and many have declined to invoke the force majeure clause.
Kyocera Corp. v. Hemlock Semiconductor, LLC:
In 2015, the Michigan First District Court of Appeals considered this question in Kyocera Corp. v. Hemlock Semiconductor, LLC.[iv] This case arose in the midst of upheaval within the solar industry caused by tensions between the United States and China. Chinese companies began engaging in the process known as “large-scale dumping,” in which a foreign producer, perhaps with state support, sells a product at a price that is lower than its cost of production to intentionally manipulate an industry and capture market share. Global solar prices began to decline (including the price of polysilicon, a critical component used in solar panels), causing numerous manufacturers to go out of business. In response, the United States imposed anti-subsidy and anti-dumping import tariffs.[v]
Kyocera, a Japanese solar panel manufacturer, had previously entered into a ten year, take-or-pay supply contract with Hemlock Semiconductor, a Michigan based polysilicon manufacturer, to purchase its polysilicon. The very nature of a take-or-pay contract allocates the risk of a rise in prices to the seller (Hemlock) and a fall in prices to the buyer (Kyocera). Kyocera argued that purchasing polysilicon at this higher price would cause its “solar business to cease to exist.” Kyocera tried and failed to negotiate a satisfactory price change with Hemlock and ultimately provided Hemlock with notice that it was excused from performance under the contract’s force majeure clause.[vi]
The Michigan First District Court of Appeals was unsympathetic, finding that economic hardship and unprofitability alone, including increased costs due to tariffs, are insufficient to invoke force majeure unless explicitly covered by the clause. The risk of falling prices fell squarely on Kyocera under its contract, and Kyocera “opted” not to protect itself.[vii] The court refused to “manufacture a contractual limitation that it may in hindsight desire by broadly interpreting the force majeure clause to say something that it does not.”[viii]
Further, the court addressed the issue of foreseeability. The court rejected Kyocera’s argument that they did not foresee the illegal actions of the Chinese government, simply stating that “markets are volatile” and that the fact that “prices may rise and fall was known to both parties and such risk was precisely allocated by the take-or-pay nature of [a]greement.”[ix]
Kyocera is one of many cases illustrating that unless very carefully drafted to say otherwise, economic hardship and decreasing profits may not be enough for a court to intervene and apply the protections of a force majeure clause. Under these cases, the most that an aggrieved party may receive is more time to comply with its contractual obligations.
So, what type of language would a court consider explicit enough to apply the force majeure clause against tariffs? We will consider this issue in an upcoming post!
[i] See Robert McClelland et al., Tariffs, Trade, China, and the States, Tax Pol’y Ctr, Urb. Inst. & Brookings Inst. (Oct. 17, 2024), https://taxpolicycenter.org/briefs/tariffs-trade-china-and-states.
[ii] See Force Majeure, Legal Info. Inst., Cornell L. Sch., (last visited Mar. 26, 2023) https://www.law.cornell.edu/wex/force_majeure#:~:text=Force%20majeure%20is%20a%20provision,or%20both%20parties%20from%20performing.
[iii] See Mark Trowbridge, Acts of God and Other Force Majeure Events, Supply Chain Mgmt. Rev. (May 2, 2022), https://www.scmr.com/article/acts_of_god_and_other_force_majeure_events.
[iv] See Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445 (Mich. Ct. App. 2015).
[v] See id. at 449.
[vi] See id. at 447, 450.
[vii] See id. at 453.
[viii] See Kyocera Corp, 886 N.W.2d at 453.
[ix] See id. at 452-53.
EU Platform on Sustainable Finance Focuses on Usefulness of Taxonomy in Response to European Commission Proposal
On the 26 March 2025, the EU Platform on Sustainable Finance (“Platform”) responded to the European Commission’s call for evidence on the draft delegated regulation amending the Taxonomy Delegated Acts[1] (the “Taxonomy”).
The Platform welcomes many of the proposed amendments and notes that several of the Platform’s recommendations from their February 2025 report on the simplification of Taxonomy reporting has been taken into consideration. However, despite this positivity, the Platform has also flagged some serious concerns with respect to the European Commission’s proposed changes to reduce the scope of Taxonomy reporting, as set out in its “Omnibus” proposals to streamline the Corporate Sustainability Reporting Directive (“CSRD”).
The Platform considers that reducing the scope of the current CSRD requirements not only results in the loss of specific Taxonomy data, but also reduces the effectiveness of the Taxonomy generally in the market. As a result, the Platform has proposed a number of updates in relation to the draft regulation, including:
introducing a regime for all companies to report partial Taxonomy-alignment;
clarifying the materiality threshold to ensure that it applies to cumulative exposure and not individual economic activities;
reporting for non-SME companies below the 1,000-employee threshold should be focused on the most essential standards (including Taxonomy-alignment); and
postponing trading books, fees and commission as key performance indicators for banks to 2027.
Additionally, the Platform has also recommended that additional guidance could be issued to support simplifying the Taxonomy’s implementation and process.
Finally, the Platform recommends some form of mechanism to be introduced to allow for responses to Taxonomy-related queries to be dealt with in real time.
[1] The regulation proposed by the Commission contains amendments the Taxonomy Disclosures Delegated Act ((EU) 2021/2178), the Taxonomy Climate Delegated Act ((EU) 2021/2139) and the Taxonomy Environmental Delegated Act ((EU) 2023/2486).
FTC Orders Fintech Company to Pay $17 Million for Allegedly Deceptive Subscription Practices
On March 27, the FTC announced that a fintech company offering cash advances through a mobile app has agreed to pay $17 million to resolve allegations that it violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). The FTC alleged that the company misrepresented the availability and cost of its services and failed to obtain consumers’ express informed consent before charging recurring subscription fees.
According to the FTC’s complaint, the company marketed its services as free and interest-free, but required users to enroll in a paid subscription plan, often without their knowledge. Consumers allegedly encountered barriers to cancellation, including disabled links and unclear steps, which resulted in unauthorized recurring charges.
Specifically, the lawsuit outlines several alleged deceptive practices, including:
Misleading “no-fee” marketing. The company advertised cash advances as fee-free, but consumers were required to enroll in a paid subscription to access the service.
Delayed access to funds. Although the company promoted instant fund transfers, consumers allegedly had to pay an additional expedited delivery fee to receive funds quickly.
Recurring charges without consent. The company allegedly failed to obtain consumers’ express informed consent before initiating subscription charges.
Insufficient disclosure of trial terms. Consumers were automatically enrolled in a paid subscription following a free trial, without clear and conspicuous disclosures.
Obstructive cancellation process. Some users were allegedly unable to cancel within the app, and others encountered unnecessary and cumbersome hurdles when attempting to prevent further charges.
Retention of charges after cancellation. The FTC alleged that the company kept charging users even after they attempted to cancel their subscriptions.
Under the stipulated order, the company must pay $10 million in consumer redress and a $7 million civil penalty. The company is also expressly barred from misrepresenting product features, charging consumers without affirmative express consent, and using designs that impede cancellation.
Putting It Into Practice: While the CFPB and state regulators continue to recalibrate their supervisory priorities, the FTC has remained consistent in its focus on unfair or deceptive acts and practices. This enforcement underscores the FTC’s longstanding commitment to stamping out deceptive marketing practices (previously discussed here, here, and here). While the CFPB has taken a step back, the FTC has continued its aggressive enforcement posture. Companies should review this enforcement action with an eye towards their own marketing practices.