Supreme Court Lifts Restraining Order on Grant Terminations
The Supreme Court recently issued a ruling with significant impacts for federal contractors and grantees looking to challenge terminations of their contracts and grants in U.S. district courts. Terminated contractors and grantees may strongly prefer to challenge terminations in the district courts rather than in the Court of Federal Claims, because the Court of Federal Claims does not have authority to grant equitable relief to do things like restore funding or enjoin terminations, and the available grounds for challenging contract and grant terminations in the Court of Federal Claims are significantly limited.
In February 2025, the Department of Education (“DOE”) terminated $600 million in grants for teacher training on the grounds that the training included diversity, equity, and inclusion (“DEI”) concepts and thus no longer effectuated DOE priorities. The grantees challenged these terminations in a lawsuit filed in the U.S. District Court for the District of Massachusetts. The District Court issued a Temporary Restraining Order (“TRO”) directing DOE to restore the terminated grant funding. DOE asked the First Circuit to stay the TRO pending appeal, which the First Circuit denied. DOE then filed an emergency appeal to the U.S. Supreme Court, where a majority of the justices sided with DOE.
In a 5-4 per curiam ruling, the Supreme Court stated that the district court likely does not have jurisdiction under the Administrative Procedures Act because the controlling law for jurisdictional purposes is likely instead the Tucker Act. The majority seems to suggest that the Tucker Act applies to disputes arising under government contracts and grants and requires plaintiffs to file lawsuits in the Court of Federal Claims—rather than the district courts. The immediate effect of the Supreme Court’s ruling is that DOE can proceed with terminating these grants while the plaintiffs’ litigation proceeds.
The dissenting opinions authored by Justices Kagan, Sotomayor, and Jackson took issue with the majority’s decision to focus on jurisdictional arguments that they feel do not require the Supreme Court’s emergency intervention. The dissenters also criticized the majority’s reasoning that by enjoining the termination of the grants, the district court was enforcing “a contractual obligation to pay money,” a type of claim that must be brought in the Court of Federal Claims. The dissenters suggested that the plaintiffs were actually seeking injunctive relief based on allegations that DOE violated a federal statute.
Although the Supreme Court’s decision is not a final, binding ruling on whether district courts have jurisdiction over challenges to contract and grant terminations, the ruling puts the jurisdictional issue front and center for all district court judges who are adjudicating termination challenges. Already we are noticing that the Department of Justice is filing Notices of Supplemental Authority in numerous other litigation challenges, arguing that the Supreme Court believes that government contractors and grantees with disputes against the United States do not belong in U.S. district court.
We will continue to monitor further legal developments as the district court in Massachusetts considers its response to the jurisdictional points that the Supreme Court majority has raised.
Rescission of Regulations Without Notice and Comment? What’s Next for Regulated Industries in the Deregulation Climate
We previously wrote about President Trump’s February Executive Order identifying deregulation as a top administration priority (here and here). That Executive Order, 14219 (the “Deregulation EO”), directed all executive departments and agencies to identify regulations falling within certain enumerated categories of regulations. More recently, on April 9, 2025, the President issued a memorandum providing further direction to executive departments and agencies regarding implementation of the Deregulation EO (available here). This memorandum addresses how the President envisions that Executive Branch agencies will go about rescinding regulations. And—spoiler alert—the vision for rescinding regulations is a departure from the typical notice-and-comment process.
The Specifics
Emphasizing adherence to recent Supreme Court decisions and the use of the “good cause” exception in the Administrative Procedure Act for expedited rulemaking (that is, rulemaking/rescission without the constraints of notice and comment), the memorandum instructs agencies, first, as part of the review-and-repeal efforts required by the Deregulation EO, to assess each existing regulation’s lawfulness under the following United States Supreme Court decisions:
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024);
West Virginia v. EPA, 597 U.S. 697 (2022);
SEC v. Jarkesy, 603 U.S. 109 (2024);
Michigan v. EPA, 576 U.S. 743 (2015);
Sackett v. EPA, 598 U.S. 651 (2023);
Ohio v. EPA, 603 U.S. 279 (2024);
Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021);
Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023);
Carson v. Makin, 596 U.S. 767 (2022); and
Roman Cath. Diocese of Brooklyn v. Cuomo, 592 U.S. 14 (2020).
Second, most significantly, the memorandum instructs agencies to then begin the rescission of any regulations they identify as unlawful under step one, without undertaking public notice and comment. The memorandum instead directs agencies to rely on the Administrative Procedure Act’s “good cause” exception. That exception allows agencies to bypass the notice-and-comment process when notice and comment is “impracticable, unnecessary, or contrary to the public interest.” The memorandum asserts that leveraging the “good cause” exception is appropriate because retaining and enforcing facially unlawful regulations is contrary to the public interest such that notice-and-comment proceedings are unnecessary in those instances where repeal of a regulation is necessary to ensure consistency with Supreme Court rulings.
The memorandum directs agencies to begin the repeal process immediately following the 60-day review period specified in the February 19 Deregulation EO (i.e., April 20, 2025). It further directs agencies, within 30 days of the review period’s expiration (i.e., May 20, 2025), to submit to the Office of Information and Regulatory Affairs a one-page summary of each regulation that the agency initially identified as falling within one of the categories specified in the Deregulation EO but which is not being targeted for repeal, explaining the basis for the decision not to repeal that regulation.
The Import
In light of this memorandum, industries should brace for potentially significant regulatory changes as agencies undertake the mandated review-and-repeal process.
Chief among the concerns we anticipate from this memorandum is uncertainty. In the first place, the plan for such large-scale use of the good-cause exception will likely draw legal challenges. Regulations promulgated with notice-and-comment procedures typically require notice and comment for their rescission. Legal challenges bring uncertainty as cases wind their way through the courts.
Affected businesses could also face uncertainty with respect to their regulatory compliance costs. For example, if a business spent significant sums to comply with a regulation that is now targeted for rescission, the business will experience a period of budgetary uncertainty until it is known whether that particular regulation will, in fact, be rescinded.
Conversely, industries that benefit from certain regulations or have invested significantly in compliance may want to proactively engage with relevant agencies to ensure these regulatory schemes are preserved. In our earlier writings, we suggested that affected businesses look for ways to proactively engage with agencies in identifying regulations for either rescission or retention, even though the Deregulation EO did not provide a direct pathway for such engagement. In the weeks since its issuance, both the Office of Management and Budget and the Federal Communications Commission have opened specific dockets requesting the public’s comment on regulations that might be targeted. (See here and here.) Potentially affected industries should take advantage of these opportunities to engage with the administration about the regulations that affect it.
Staying proactive and informed about the regulatory landscape is crucial for businesses to navigate the potential opportunities and risks presented by this new directive. Blank Rome’s team of lawyers is available to guide you through these regulatory changes and help you address the implications for your industry.
Petitions Filed to Add Chemicals to List of Chemical Substances Subject to Superfund Excise Tax
On April 2 and April 3, 2025, the Internal Revenue Service (IRS) announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Polyisobutylene (90 Fed. Reg. 14521): Petition filed by TPC Group, Inc., an exporter of polyisobutylene;
Acrylonitrile butadiene styrene (90 Fed. Reg. 14687): Petition filed by Trinseo LLC, an importer and exporter of acrylonitrile butadiene styrene;
Acrylonitrile-butadiene rubber (90 Fed. Reg. 14684): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of acrylonitrile-butadiene rubber;
Chloroprene rubber (90 Fed. Reg. 14691): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of chloroprene rubber;
Emulsion styrene butadiene rubber (90 Fed. Reg. 14692): Petition filed by Michelin North America, Inc., an importer of emulsion styrene butadiene rubber;
Emulsion styrene-butadiene rubber (90 Fed. Reg. 14686): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of emulsion styrene-butadiene rubber;
Ethylene vinyl acetate (VA < 50 percent) (90 Fed. Reg. 14688): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene vinyl acetate (VA < 50 percent);
Ethylene vinyl acetate (VA ≥ 50%) (90 Fed. Reg. 14683): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene vinyl acetate (VA ≥ 50 percent);
Ethylene-propylene-ethylidene norbornene rubber (90 Fed. Reg. 14695): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene-propylene-ethylidene norbornene rubber;
Hydrogenated acrylonitrile-butadiene rubber (90 Fed. Reg. 14686): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of hydrogenated acrylonitrile-butadiene rubber;
Hydrogenated acrylonitrile-butadiene rubber (90 Fed. Reg. 14685): Petition filed by Zeon Chemicals L.P., an importer and exporter of hydrogenated acrylonitrile-butadiene rubber;
Isobutene-isoprene rubber (90 Fed. Reg. 14689): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of isobutene-isoprene rubber;
Solution styrene-butadiene rubber (90 Fed. Reg. 14690): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of solution styrene-butadiene rubber;
Bromo-isobutene-isoprene rubber (90 Fed. Reg. 14694): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of bromo-isobutene-isoprene rubber;
Poly(ethylene-propylene) rubber (90 Fed. Reg. 14690): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of poly(ethylene-propylene) rubber;
Solution styrene-butadiene rubber (90 Fed. Reg. 14693): Petition filed by Michelin North America, Inc., an importer of solution styrene-butadiene rubber; and
Styrene-acrylonitrile (90 Fed. Reg. 14693): Petition filed by Trinseo LLC, an importer and exporter of styrene-acrylonitrile.
Comments on the petitions are due June 2, 2025. More information on the Superfund excise tax on chemicals is available in our July 13, 2022, memorandum, “Superfund Tax on Chemicals: What You Need to Know to Comply” and our May 19, 2022, memorandum, “Reinstated Superfund Excise Tax Imposed on Certain Chemical Substances.”
Six Questions Flowing From President Trump’s Recent Suite of Energy-Focused Actions
President Trump’s energy-focused ambitions will generate work for regulators at all levels of the government.
In the first two weeks of April, the president issued several orders and a related memorandum that could potentially turn energy regulation on its head by overturning nearly a century of precedent on regulation of the electric industry, including challenging the so-called Insull regulatory compact and the role of each state in regulating the electric industry’s operations within its borders.
The Trump Administration seeks to promote “baseload” energy development by limiting states’ ability to adopt climate mitigation strategies (including cap and trade and renewable portfolio standards) and by taking new authority to permit development of reserves of fossil fuels and other minerals critical to the energy space. In combination, these actions affect nearly all aspects of the energy space and potentially portend radical changes to the balance between state and federal energy regulation if carried through.
Below, we will summarize each of these actions, outline how they fit into the context of President Trump’s broader agenda, and outline issues for the regulated community to watch.
President Trump’s Executive Orders and Memoranda
Promoting Coal and Fossil Fuels
In an Executive Order titled “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241,” the Trump Administration reaffirmed its position that “coal is essential to our national and economic security” and detailed a number of policies designed to expand and encourage coal-fired electricity generation:
Encouraging Domestic Coal Mining:The Order calls for a report on coal reserves on federal land and the termination of an Obama-era moratorium on leases for coal extraction on federal land. The Order also directs the recently created Energy Dominance Council to designate coal as a “mineral” pursuant to a March Executive Order on Immediate Measures to Increase American Mineral Production.
Encouraging Coal-Fired Electricity Generation: The Order directs federal agencies to review existing federal rules, policies, and guidance aimed at transitioning away from coal-fired generation and to revise or rescind those policies where possible. The Order also directs agencies to identify and promote opportunities for the export of American coal, and to research and provide funding or other support for the use of coal-fired energy to power artificial intelligence data centers or for the development and improvement of coal-related technologies.
Limiting Administrative Requirements:The Order directs agencies to identify types of coal-related activities that could be categorically excluded from environmental impact reviews under the National Environmental Policy Act. The Order further calls for investigation into whether coal may be considered a “critical material” for the production of domestic steel.
A second related Executive Order titled “Regulatory Relief for Certain Stationary Sources to Promote American Energy” granted a two-year extension for coal-fired power plants to comply with federal Mercury and Air Toxics Standards emissions limitations.
Finally, a third Executive Order titled “Strengthening the Reliability and Security of the United States Electric Grid” authorized the use of emergency powers to require existing fossil fuel-fired power plants to stay online. Citing its earlier declaration of a “National Energy Emergency,” the Administration preemptively invoked Section 202 of the Federal Power Act, which allows the Federal Energy Regulatory Commission (FERC) to require specific energy generation or facility interconnection to meet energy demands in times of war or emergency. The Order directs FERC to identify regions where federal intervention may be necessary and specifically directs the agency to prevent certain large energy generation resources “from leaving the bulk-power system or converting the source of fuel” if the conversion would reduce total energy generation.
Limiting State Influence on Energy Regulations
A separate Executive Order, “Protecting American Energy From State Overreach,” seeks to limit state climate change laws that the Trump Administration claims are harming domestic energy production. Specifically calling out New York and Vermont laws imposing liability for greenhouse gas emissions as well as California’s carbon emission cap-and-trade system, the Order directs the Attorney General to identify and “take all appropriate action to stop the enforcement of” state laws that burden the “identification, development, siting, production, or use of domestic energy resources.” While we do not know what state laws the Attorney General will identify and presumably seek to preempt through litigation, likely suspects would include state decarbonization requirements and environmental justice programs. Federal agencies have already sought to curtail funding for many of these programs.
Rolling Back Federal Regulatory Hurdles
President Trump signed an Executive Order entitled “Zero-Based Regulatory Budgeting to Unleash American Energy” seeking to require reexamination of regulations which have the potential to sit on the books unexamined for long periods of time. For agencies touching upon energy issues (e.g., US Environmental Protection Agency, the US Army Corps of Engineers, and the US Department of Energy), agencies must include a “sunset rule” rendering regulations invalid no more than five years in the future unless the Director of the White House Office of Management and Budget determines that the new regulation or amendment “has a net deregulatory effect.”
Additionally, President Trump issued a memorandum to the heads of Executive Departments, “Directing the Repeal of Unlawful Regulations.” The memorandum notes that several recent US Supreme Court decisions have placed limits on the power of federal agencies, including Loper Bright Enterprises v. Raimondo (reducing deference given to agency interpretations of statutes), West Virginia v. EPA (preventing agencies from resolving “major” economic or political questions), and Sackett v. EPA (narrowing the definition of water bodies subject to federal Clean Water Act regulation). The memorandum suggests that many regulations, arguably in conflict with those decisions, remain on the books and directs the heads of federal agencies to identify any “potentially unlawful regulations” and to “immediately take steps to effectuate the repeal” of those regulations in whole or in part. The memorandum directs agency heads to, where possible, invoke the “good cause” exception of the Administrative Procedure Act to repeal regulations without the usual public notice and comment, arguing that notice and comment is “unnecessary” where the existing regulations are inconsistent with a Supreme Court ruling.
The Orders in Context
These orders collectively reorient the US energy space. Pointing to the nation’s large reserves of coal, oil, natural gas, and critical minerals as well as the capacity for nuclear, hydropower, biofuel, and geothermal energy production, the Trump Administration has repeatedly promised the development of a “Golden Era” of US energy dominance.
With these actions, the Trump Administration fleshes out how it intends to assert “energy dominance.” Below are six open questions:
1. Are fuel choices driven by regulation or by practical concerns (like technology or cost)?
The current set of executive orders implicitly assume that regulatory burden alone has compelled the transition toward renewable energy. But the truth is more complicated. While the United States historically relied on a substantial fleet of coal-burning power plants, recent years have seen many states actively encouraging energy producers to move away from fossil fuels for power generation, in favor of renewable sources of energy like wind and solar. A combination of factors have caused coal generation capacity to fall over 50% from 302 GW/year in 2013 to 181 GW/year in 2023. This switch does not necessarily fall along “red state vs. blue state” lines, with states including Texas, Idaho, and South Dakota toward the top of the nation in terms of renewable energy development. It remains to be seen whether the removal of federal limitations will reverse that trend.
2. Will this regulatory shakeup spur long-term energy development?
Large-scale energy production is a long-term investment that needs to be cost effective over decades. The combination of these orders reenforcing supports for “baseload” power may result in a situation where a project’s long-term viability is more certain. However, state renewable portfolio standard requirements or state programs encouraging renewable development may present headwinds.
3. Will future federal actions undercut state energy programs?
Energy planning seeks to balance considerations including energy security (i.e., that energy is always available), affordability, sustainability, and resilience (i.e., that energy facilities are sited in such a manner that they will be available for their expected lifespan). While the Trump Administration is clearly focused on overall affordability of energy, the recent suite of orders may undercut state-level balancing efforts, particularly those focused on “energy justice” in terms of grid planning. (For more, see here.) We will continue to watch whether this will occur.
4. How much litigation will result from the executive orders?
As we have discussed, executive orders alone cannot displace regulations or federal statutes. The mechanics of how these orders work — through processes like limiting public participation requirements — are likely to result in allegations that statutory rights to public participation are violated. Finally, states including California, Colorado, Illinois, Maryland, Minnesota, North Carolina, Oregon, and Rhode Island have passed broad-state specific legislation seeking to reduce emissions.
5. Will US Congress need to weigh in to preempt state laws?
One of the executive orders directs the Attorney General to review state programs to find issues preempted by federal law. We have discussed the drift between federal environmental policy and the policy in some states. (See here, here, and here.) Recent Supreme Court decisions in the preemption space have limited preemption to areas where Congress has spoken directly. (See here and here.)
6. How will these orders impact future renewable energy project development?
Many renewable energy projects currently in development are moving forward through this period of uncertainty based on utility planning for compliance with state regulatory requirements, such as renewable portfolio standards. If the effort to “limit state overreach” results in the weakening or elimination of state compliance standards, one of the most effective demand-pulls for renewable energy could effectively be shut down.
The QPAM Exemption – Key Takeaways for Fund Managers with Benefit Plan Investors
As an asset manager, you may be familiar with the regulatory issues that come into play when a fund permits investments from “benefit plan investors,” which generally include certain employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and individual retirement accounts. The main concerns include the need to avoid “prohibited transactions” under ERISA and the Internal Revenue Code of 1986, as amended (the “Code”), and the application of fiduciary status under ERISA when benefit plan investor investments become significant enough so that the fund is deemed to hold ERISA “plan assets.”
Often, managers will work to structure the fund so as to avoid being deemed to hold ERISA plan assets, for example, by limiting benefit plan investor investments to no more than 25% of the fund’s total assets. But what if a sizeable benefit plan investor wants to invest in the fund? How can you track what may and may not be considered a “prohibited transaction” or be confident you’re not inadvertently triggering a breach of your ERISA fiduciary duties? For funds with numerous or sizeable benefit plan investors (generally those exceeding 25% of the fund assets), asset managers may seek relief under the Department of Labor’s Prohibited Transaction Exemption 84-14, as amended, which applies to certain “qualified professional asset managers” or “QPAMs.” This exemption is commonly referred to as the “QPAM Exemption.”
What is the QPAM Exemption?
The QPAM Exemption provides relief from federal excise taxes and required compliance actions that otherwise apply if the fund were to engage in a prohibited transaction under ERISA or the Code.
What transactions are prohibited under ERISA and the Code?
As a general rule, a fiduciary that manages ERISA assets may not use those assets to engage in the sale or exchange, leasing of property, loan or extension of credit, or certain other transactions with a “party in interest” or a “disqualified person.” These transactions are prohibited unless an exception applies. Under ERISA and the Code, the list of “parties in interest” and “disqualified persons” is long and includes service providers to the employee benefit plan (such as the plan’s accountants, attorneys, and brokers with whom the plan conducts business), certain affiliates of the plan, and employee participants and employer sponsors of the plan, among other persons. Many ordinary course transactions are swept into the category of “prohibited transactions.”
What happens if the fund engages in a prohibited transaction?
The IRS imposes a 15% excise tax on the amount involved in any prohibited transaction for each year in which the transaction continues. In addition, any prohibited transaction must be unwound, which can be costly and time-consuming. Engaging in a prohibited transaction is also considered a breach of fiduciary duty under ERISA, which could result in personal liability for plan losses with respect to any individual asset manager with discretionary management authority over the fund’s ERISA plan assets.
Why is it important to qualify as a QPAM?
Asset managers must avoid entering into prohibited transactions when no exemption is available. Due to the sweeping nature of the types of transactions deemed prohibited under ERISA and the Code, managers may find it nearly impossible to enter into many types of transactions on behalf of benefit plan investor clients without first obtaining extensive representations from the investor to ensure the fund won’t inadvertently engage in a prohibited transaction. The QPAM Exemption relieves a manager that qualifies as a QPAM of this administrative burden and operates to avoid the potential for excise taxes and other penalties by excluding many of common transactions that would otherwise be prohibited under ERISA and the Code. In addition, certain lenders transacting with the fund often require the fund to either represent that it does not manage ERISA plan assets or that it qualifies as a QPAM under the QPAM Exemption before moving forward with any loan or credit facility transaction.
Are all prohibited transactions exempt under the QPAM Exemption?
No. Prohibited transactions are generally divided into two categories – party in interest transactions, and fiduciary self-dealing transactions. The QPAM Exemption only applies to the party in interest transactions. Unless another exception applies, a fiduciary managing ERISA plan assets may not engage in certain self-dealing transactions (for example, those involving conflicts of interest between the fund and the benefit plan investor).
Who may qualify as a QPAM?
QPAM status is only available to registered investment advisers (RIAs) and certain types of banks and savings and loan institutions. RIAs seeking QPAM status must generally have total client assets under management and shareholder or partner equity in excess of the thresholds stated in the table below.
Fiscal Year Ending no Later than
AUM Requirement
Equity Ownership Requirement
December 31, 2024
$101,956,000
$1,346,000
December 31, 2027
$118,912,000
$1,694,000
December 31, 2030
$135,868,000
$2,040,000
What else is required to maintain status as a QPAM?
In addition to the qualification requirements, an RIA seeking QPAM status must meet the requirements summarized below.
The RIA must notify the DOL of its intent to rely on the QPAM Exemption, when it changes its name, and again when it no longer qualifies as a QPAM.
The QPAM must acknowledge its fiduciary status in writing.
No single employee benefit plan (including certain affiliate plans) may make up more than 20% of the QPAM’s assets under management.
The party in interest cannot have certain types of authority over the manager.
The QPAM must make an independent decision to enter into the transaction and must have the sole responsibility for the management of plan assets.
The party in interest involved in the transaction cannot be the QPAM or a person related to the QPAM.
The terms of the transaction must be at arm’s length.
The QPAM must maintain records of the transaction for at least six years.
The QPAM and its affiliates must not have engaged in certain disqualifying acts.
We are an RIA seeking to qualify as a QPAM. What’s next?
An investment manager seeking to qualify as a QPAM should first determine whether it currently meets or will meet all of the requirements to satisfy the QPAM Exemption. The qualification points should be fully vetted before notifying the DOL of the intent to qualify and well before making any representations to benefit plan investors or other parties that it may engage in a transaction as a QPAM.
TRAPPED: Appellate Court Holds Realtor.Com Cannot Compel Arbitration in TCPA Class Action On Lead Gen Form Sold to Subsidiary
Really important case for everyone in leadgen to pay attention to.
The lead generation industry continues to create TCPA risk for lead buyers– and even seemingly valid leads can cause a bunch of trouble if lead buyers don’t handle data correctly.
The case against Realtor.com involving leads sold by a website operator to Opcity, Inc.–a subsidiary of Move.com who operates as Realtor–is a great example.
In Faucett v. Move,Inc. 2025 WL 1112935 (9th Cir. 2025) the Court of Appeals upheld a district court’s ruling refusing to enforce an arbitration provision in favor of Move.com.
The underlying facts are pretty straightforward.
Guy allegedly visited HudHomesUSA.org and filled out a consent form and accepted an arbitration agreement.
The consent form included Opcity and the website operator sold the lead to Opcity (not clear if it was sold directly or through aggregators.) However the arbitration agreement operated only in favor of the website operator and its “affiliates.”
Opcity somehow allegedly transferred the lead to Move.com who allegedly made outbound calls to Plaintiff in reliance on the lead.
Plaintiff sued Move.com who tried to enforce the arbitration agreement arguing it was an “affiliate” of the website operator. The lower court and appellate courts both disagreed.
The courts determined Opcity was likely not an affiliate of the website operator because the terms implied a corporate relationship in this context and none existed. But even if one did exist via contract between Opcity and the website operator, Move.com had no such relationship and it was a separate entity from Opcity.
Further although Opcity was on the lead form that was not sufficient to expand the reach of the arbitration agreement to it, and even if OpCity could be viewed as a third-party beneficiary of the consent form–unclear–Move.com certainly could not be because it was not on the consent form.
So the take away here is that arbitration clauses in leadgen forms likely DO NOT extend to all marketing partners on a hyperlink and DEFINITELY DO NOT extend to entities related to those marketing partners.
To avoid results like these lead buyers should REQUIRE lead sellers to NAME THEM not just on marketing partners pages but also on arbitration provisions. Stated alternatively, the arbitration and consent provisions on lead generation websites should be co-extensive. So the parties bound by arbitration provisions on lead generation websites should include all marketing partners on the list!
TCPA REVOCATION LESSON: Cenlar’s $714,000.00 TCPA Revocation Settlement Arrives Just In Time to Crystalize Risk
So last Friday the FCC’s new TCPA revocation order went into effect.
While the nastiest parts of the ruling were stayed for one year thanks in large part to the major banks–thanks ABA/MBA and the rest of you!–a good portion of the rule did go into effect.
For those who are not on their revocation game and properly tracking requests the final approval order in a new TCPA class settlement arrives just in time to help you change your ways!
In Kamrava v. Cenlar 2025 WL 1116851 (C.D. Cal April 14, 2025) the court granted final approval to Cenlar’s settlement of a TCPA class involving servicing calls made after revocation of consent.
In many ways this was a throw back case as revocation classes have fallen by the wayside in recent years– leading to less focus on getting it right in some circles. Indeed, the case was filed way back in 2020 and is something of an oddity in today’s TCPAWorld landscape. However, the FCC’s new ruling supercharges risk here, which is why the settlement is so important.
The classes in Kamrava are as follows:
All persons within the United States who received an automated call to their cellular telephone, after revocation of consent, within the TCPA Class Period from defendant or a loan servicer on whose behalf Defendant was sub-servicing, its employees or its agents (the “TCPA Settlement Class”).and
All persons with addresses within the State of California who requested in writing that Defendant or the loan servicer on whose behalf Defendant was sub-servicing to stop contacting them and thereafter (i) received a letter asking them to sign and return a form confirming their cease-and-desist request or (ii) received at least one subsequent telephone call within the RFDCPA Sub-Class Period (the “RFDCPA Settlement Sub-Class”).
I was not involved in the case but I would guess what happened here is Cenlar was only temporarily stopping calls in response to an oral revocation request and then sending out a written letter which, if not returned within a certain timeframe, would result in calls beginning anew.
Thee claims arise between tension between TCPA and FDCPA/RFDCPA revocation rules. Under the debt collection statutes only written requests to stop calls must be honored. But under the TCPA any reasonable means of conveying a revocation is effective– so calls using regulated technology must stop immediately, even if manually launched calls may continue.
Its all part of a thicket of arcane TCPA requirements that can twist an ankle or skin a knee. And in this case Cenlar got snagged for nearly three quarters of a million dollars.
Plaintiffs’ Bar Tries to Get Around Nevada Supreme Court with Amendment to AB 3
As discussed in a prior article, Nevada’s Assembly Bill 3 would increase the jurisdictional cap for the state’s court-annexed arbitration program from $50,000 to $100,000. The cap was last adjusted in 2005, and inflation has reduced the number of cases that are submitted to the program. Now, the plaintiff-oriented Nevada Justice Association (NJA) has proposed an amendment to the bill.
AB 3’s original text simply amended NRS 38.250, changing the $50,000 limit to $100,000. The NJA’s amendment goes far beyond that that scope:
It attempts to overrule Nevada Arbitration Rule 16(e). The rule currently caps the attorneys’ fees recoverable in an arbitration at $3,000. NJA’s amendment would increase that to $15,000.
It attempts to expand NAR 5(a)’s list of automatically exempted cases.
It proposes deleting NRS 38.359’s requirement that the arbitrator’s non-binding award be presented to a jury in a subsequent trial.
It proposes limiting short-trial cases to those where the arbitration award is $50,000 or less. If the arbitration award is $50,000 or more and trial de novo is requested, then the case would be removed to the standard district court process.
These changes may be an attempt to circumvent the Supreme Court’s rulemaking process, as NJA attempted with NRS 52.380 and NRS 629.620. On March 24, 2022, the Supreme Court of Nevada created a committee to Study the Rules Governing Alternative Dispute Resolution and Nevada Short Trial Rules under ADKT 0595. A 10-member committee was formed to review the rules.
The order appointing the Committee included three personal injury lawyers, two of whom are NJA board members. The Committee studied the rules and filed a report that made various recommendations. The suggested changes did not include the cap on attorneys’ fees and did not create a two-tier short trial program, but did expand the list of automatically exempt cases. The Supreme Court adopted the proposed amendments in an order filed October 26, 2022.
The Supreme Court studied the arbitration program and revised the rules to facilitate a better program for all participants. Notably, it could have:
Raised the fee cap in NAR 16(e), but chose not to.
Expanded the list of automatically exempt cases, but chose not to.
Created a two-tier trial de novo process, but chose not to.
Conclusion
As amended, parts of AB 3 may be unconstitutional for the same reasons discussed in Lyft v. Dist. Ct. Further, by creating a two-tier trial de novo process, the amended AB 3 is inconsistent. Thus far there is no explanation for why the nonbinding arbitration program is appropriate for cases up to $100,000 but the short-trial program is good only for cases up to $50,000. If the program’s goal is to conserve judicial resources by directing cases away from the district court, then a two-tier trial de novo program does not contribute to that goal.
CMS to Withdraw Federal Medicaid Match for Workforce, Social Needs, and Infrastructure: What States, Health Care Providers and Community Organizations Need to Know
In a move signaling a major shift in federal priorities, the Centers for Medicare & Medicaid Services (“CMS”) recently announced it will limit federal funding for state Medicaid initiatives that support services beyond direct medical care. New policy guidance indicates that CMS intends to narrow the scope of the federal-state Medicaid partnership, refocusing matching funds on core healthcare services delivered to Medicaid beneficiaries. The timing is notable, as Congress and state Medicaid leaders brace for the potential of more significant cuts to federal funding for Medicaid in the upcoming federal budget reconciliation process.
On April 10, CMS notified states that it will no longer approve new, or renew existing, state proposals for Section 1115(a) Demonstration Project expenditure authority to provide federal matching funds for state expenditures for designated state health programs (“DSHP”) and designated state investment programs (“DSIP”).
Section 1115 of the Social Security Act authorizes the Secretary of the U.S. Department of Health and Human Services (“HHS”) to waive any federal Medicaid requirements for demonstration projects that are “likely to assist in promoting Medicaid objectives.” Section 1115 waiver authority has long been a tool for states to expand coverage to populations or services not otherwise eligible for federal Medicaid matching funds and to reinvest savings in other Medicaid initiatives – provided the overall project remains budget neutral to the federal government. Budget neutrality is typically assessed against what projected federal expenditures would be without the waiver and is the subject of detailed negotiations between states and CMS.
Beginning in 2005, CMS allowed states to claim federal matching funds for certain existing, state-funded programs that would not otherwise qualify – designated as DSHPs. Although CMS sought to phase out these arrangements during the Trump administration in 2017, the Biden administration resumed approval of DSHPs and DSIPs in several states, including New York Arizona, California, Hawaii, Massachusetts, North Carolina, Oregon and Washington.
For many states, DSHP and DSIP were a key part of their broader strategies to address healthcare provider shortages, strengthen care delivery systems, and support vulnerable populations through upstream public health and health-related services interventions. The shift in federal policy leaves state Medicaid agencies, hospitals, health care providers, and community-based organizations facing a new set of tradeoffs about where and how to support Medicaid patients and their communities.
Approved programs must meet specific parameters established by CMS, including that they are population or public health focused and serve a community largely made up of low-income individuals, and the state must show that the “freed up” state funding is used for another demonstration initiative that will promote the objectives of the Medicaid program. Some of the recently approved programs include:
$310 million in grant funds to support the training for primary care professionals who commit to practicing in an underserved area, and $17 million for a physician loan repayment program in California;
$105 million to support caregivers and people with dementia through community-based supports and $20 million for non-medical services such as housekeeping, personal care, and case management for older adults in New York; and
$20 million in telehealth infrastructure grants to rural healthcare providers to purchase equipment and high-speed internet access necessary to support telehealth services in North Carolina.
CMS explained that: “DSHPs and DSIPs have grown from approximately $886 million in 2019 to nearly $2.7 billion in eligible expenditures in 2025, representing increasing costs to the federal government without a sustainable state contribution.”
CMS’s policy announcement follows another policy change in early March, when CMS signaled it would evaluate state requests for federal Medicaid support for housing and nutrition services and supports on a case-by-case basis – rolling back broader flexibilities previously offered to state Medicaid programs to address health-related social needs.
The withdrawal of federal matching funds for Medicaid initiatives targeting health-related social needs, workforce development and infrastructure marks a significant shift in the federal-state partnership. States may now have to reassess or scale back innovative approaches that have shown promise in improving health outcomes and keeping low-income individuals – particularly older adults and children – out of institutional settings. At the same time, a growing body of research underscores the value of these investments in achieving long-term cost savings and better population health. It remains to be seen how CMS will handle discussions with states about their existing DSHP and DSIP authority or how states will respond in future Section 1115 waiver proposals and renewals. We will be tracking these developments closely in the coming months.
Whistleblower Alleges Disturbing Data Breach Risks at the NLRB Involving Musk-Linked “DOGE” Team
A recent report from National Public Radio (NPR) has detailed alarming allegations of data mishandling and security breaches at the National Labor Relations Board (NLRB). The whistleblower, Daniel Berulis, an information technology (IT) employee with the NLRB, alleges a series of alarming actions taken by Elon Musk’s “Department of Government Efficiency” (DOGE) team. Mr. Berulis’s complaint describes multiple instances of unauthorized system access, suspicious data exportation, and attempts to conceal DOGE’s activities within the NLRB systems. The allegations raise serious concerns about the security of sensitive labor data and the potential for conflicts of interest involving Mr. Musk.
Details of the Whistleblower Allegations
According to the whistleblower, the DOGE team arrived at the agency in March 2025 demanding and receiving “tenant owner level” access to the NLRB’s internal computer systems, granting them virtually unrestricted permission to view, copy, and alter data.
Mr. Berulis reports that this data includes “information about ongoing contested labor cases, lists of union activists, internal case notes, personal information from Social Security numbers to home addresses, proprietary corporate data and more information that never gets published openly.”
Because DOGE received this high-level access without the common security constraints that monitor network activity, Mr. Berulis had limited ability to track any potential breaches in real time. However, Mr. Berulis was later able to put together “puzzle pieces” to track a significant increase of data leaving the NLRB’s network, potentially including sensitive information about union organizing efforts, ongoing legal cases, and confidential corporate secrets. Even when external parties are granted access to such data, it almost never leaves the NLRB system. Additionally, the IT team detected suspicious login attempts from a Russian IP address using one of the newly created DOGE accounts “within minutes” of DOGE accessing the NLRB’s systems, raising further concerns about a potential breach.
Upon reporting his concerns to Congress, the U.S. Office of Special Counsel, which investigates complaints by federal government whistleblowers, and internally to the NLRB, Mr. Berulis experienced suspected acts of retaliation, including someone “physically taping a threatening note” to his door that included sensitive personal information and a photo of him walking his dog.
A Chilling Effect for Workers… and Employers
The possibility that NLRB records may have been copied and exported from the agency may create a severe chilling effect for employees everywhere who turn to the agency for protection.
One expert commented to NPR that these breaches were so severe that if this were “a publicly traded company, I would have to report this [breach] to the Securities and Exchange Commission. The timeline of events demonstrates a lack of respect for the institution and for the sensitivity of the data that was exfiltrated. There is no reason to increase the security risk profile by disabling security controls and exposing them, less guarded, to the internet. They didn’t exercise the more prudent standard practice of copying the data to encrypted and local media for escort.”
The NPR report notes that in addition to creating risks for individuals trying to organize, leaked data may also reveal internal business planning for companies who are facing unfair labor practice complaints, or even trade secrets.
Potential Conflicts of Interest
The report raised that concerns of potential conflicts of interest between Musk and the NLRB, including an ongoing lawsuit between Musk’s company, SpaceX, and the agency in which SpaceX challenges the constitutionality of the NLRB’s structure.
Several lawsuits have been filed DOGE’s activities at other agencies related to its management of Americans’ data, including Social Security information, IRS records, and other agency records.
Help is available for whistleblowers
The Whistleblower Protection Act (WPA) protects federal government employees from certain adverse employment actions that occur because they disclosed information relating to unlawful activities or “gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety.”
Idaho Joins the De-Banking Ban Wave
Starting July 1, 2025, Idaho will subject financial institutions with total assets over a certain threshold to new restrictions under the Transparency in Financial Services Act. The law follows a growing trend among states seeking to ensure fair access to banking and prevent financial denials based on political, religious, or ideological factors — often known as “de-banking.” Idaho’s statute has much in common with laws passed in Tennessee and Florida (which we covered here) over the past two years.
Covered Institutions and Activities
Like Tennessee (but unlike Florida), Idaho’s statute is crafted to target only larger institutions. Covered financial institutions include:
Banks with over $100 billion in total assets; and
Payment processors, credit card networks, or other payment service providers that processed over $100 billion in transactions in the previous year.
Idaho’s law extends beyond Idaho-chartered institutions, as national banks are specifically covered.
The law applies to any decision involving financial services, which is defined in general terms as “any financial product or service.” This presumably includes the full spectrum of lending, deposits, payments, and other activities offered by the covered institutions.
Prohibited Discrimination Based on “Social Credit Scores”
At the heart of the statute is a prohibition on financial institutions using “social credit scores” to deny or restrict “financial services.” The law defines “social credit scores” broadly, and it includes any analysis or rating that penalizes:
Religious beliefs or practices;
Political expression or associations;
Failure to conduct diversity, equity, or gender-based audits;
Refusal to assist employees in obtaining abortions or gender reassignment services; and/or
Lawful business activities in the fossil fuel or firearms sectors.
The statute allows institutions to apply financial risk-based standards to firearms and fossil fuel businesses, but only if the standards are impartial, quantifiable, and disclosed to customers.
New Explanation Requirement
If a financial institution denies or restricts services, an Idaho customer can request a written explanation. The institution must respond within 14 days and provide:
A detailed basis for the decision;
A copy of the applicable terms of service; and
Specific contract provisions that justify the denial.
Enforcement and Private Rights of Action
Violations of the Transparency in Financial Services Act are treated as violations of Idaho’s Consumer Protection Act. The state attorney general may investigate violations and initiate enforcement actions. But the statute also creates a private right of action: Individuals harmed by violations can sue directly and seek remedies under Idaho’s consumer protection framework.
Preparing for Compliance
Financial institutions covered by the law should begin preparing in advance of the July 1, 2025, effective date. Key steps include:
Evaluating whether service denial or risk assessment practices may encompass any of the prohibited “social credit” criteria.
Familiarizing compliance teams with the law’s requirements to ensure they understand the distinctions between legal risk management and impermissible discrimination.
Assigning personnel to process and respond to customer requests for explanation in a timely fashion.
A National Trend to Watch
Idaho is now the third state to pass a fair access to banking law, and it may not be the last. Financial institutions should give careful thought to their policies and models insofar as they touch on the hot-button activities and issues that animate the de-banking debate.
DHS Revokes Legal Status, Sends Parole Termination Notices to CBP One App Users in United States
On April 11, 2025, DHS sent a Notice of Parole Termination to individuals who utilized the Biden-era online appointment CBP One App to enter and stay in the United States on Humanitarian Parole while applying for asylum.
Previously, after attending an appointment at the U.S.-Mexico border, individuals were paroled into the United States for an initial period of two years. Once in the United States, individuals were eligible to apply for work authorization. Approximately 900,000 individuals entered the United States using the CBP One App. DHS has not revealed how many individuals have received the April 11, 2025, termination notice.
The termination notice directs individuals who have not obtained an immigration status other than parole to depart the United States within seven days or risk removal.
The notice states that recipients can utilize the new CBP Home App to arrange for their departure from the United States.
The announcement is the most recent of several DHS decisions terminating other programs including Temporary Protected Status (TPS) for Venezuelan and Haitian nationals, and the CHNV Humanitarian Parole program. Termination of TPS and CHNV parole have been temporarily enjoined as part of ongoing federal litigation. Judge Edward Chen, a district court judge in the Northern District of California, has issued a ruling halting the termination of Venezuela TPS. In response to the ruling, DHS has announced that Venezuela TPS has been automatically extended until Oct. 2, 2026, for individuals who registered under the 2023 designation, and until Sept. 10, 2025, for individuals who registered under the 2021 designation. Judge Indira Talwani, a district court judge in the District of Massachusetts, has issued a ruling halting the termination of Humanitarian Parole for citizens of Cuba, Haiti, Nicaragua, and Venezuela, also known as the CHNV program. Accordingly, an individual’s parole can only be terminated prior to their expiration date based on a case-by-case review.
Individuals paroled into the United States under the CBP One App who are not otherwise covered by the ongoing Venezuela or Haitian TPS or CHNV litigation should consult with an immigration attorney before making plans to depart the United States.