Changes to Civil Rights Enforcement: New Executive Order Eliminates Disparate-Impact Liability in Federal Regulations
On April 23, 2025, the President issued an Executive Order (“EO”) titled “Restoring Equality of Opportunity and Meritocracy” that seeks to drastically curtail the use of disparate-impact liability in federal regulations, marking a significant shift in the federal government’s approach to civil rights enforcement. What does this mean for companies going forward?
BackgroundLet’s start with a review of disparate-impact liability under civil rights laws. This concept refers to practices or policies that, while seemingly neutral, disproportionately affect members of a protected class. This type of liability does not require proof of intentional discrimination; instead, it focuses on the outcomes of the policies or practices.
For example, under Title VII of the Civil Rights Act of 1964, disparate-impact liability occurs when an employment practice adversely affects one group more than another, even if the practice appears neutral. If a plaintiff can show that a policy has a disproportionately negative effect on a protected class, the burden shifts to the defendant to demonstrate that the practice is job-related and consistent with business necessity. Disparate-impact liability is also recognized under several other federal and state civil rights laws.
The EO asserts that the foundational principle of the United States is equality of opportunity, not equality of outcomes. The EO criticizes disparate-impact liability as a “pernicious movement” that, in the administration’s view, undermines meritocracy and the constitutional guarantee of equal protection. Disparate-impact liability, as described in the EO, is a legal doctrine that presumes unlawful discrimination based solely on statistical differences in outcomes among groups, even absent any discriminatory intent or facially discriminatory policy. The EO contends that this doctrine compels employers and businesses to consider race or other protected characteristics in decision-making, thereby encouraging racial balancing and undermining individual merit.
Key EO Provisions
The EO focuses on deprioritizing enforcement of any rules that impose disparate-impact liability. It directs the attorney general, in coordination with agency heads, to identify all existing regulations, guidance, rules, or orders that impose disparate-impact liability and reporting on steps for their amendment or repeal within 30 days. The review also extends to state laws and decisions that impose disparate-impact liability. In addition, the EO requires the following:
Revocation of Prior Approvals and Regulations: The EO revokes prior presidential approvals of Department of Justice regulations under Title VI of the Civil Rights Act of 1964 to the extent they impose disparate-impact liability. Specific regulatory provisions in 28 C.F.R. 42.104 are identified for revocation.
Review of Pending Matters: Within 45 days, the attorney general and the chair of the Equal Employment Opportunity Commission (“EEOC”) must assess all pending investigations, civil suits, or positions in ongoing matters under federal civil rights laws that rely on disparate impact liability and take appropriate action consistent with the new policy. The EO directs other agencies, including the Department of Housing and Urban Development and the Consumer Financial Protection Bureau, to review pending proceedings under the Fair Housing Act, Equal Credit Opportunity Act, and related statutes.
Review of Existing Judgments: The EO directs all agencies to evaluate, within 90 days, existing consent judgments and permanent injunctions that rely on disparate-impact theories and take appropriate action.
Future Agency Action and Guidance: The EO directs the attorney general to determine whether federal law preempts state laws imposing disparate-impact liability and to take appropriate measures. The EO also tasks the attorney general and the EEOC Chair with issuing guidance to employers on promoting equal access to employment, including for applicants without a college education.
Implications for Employers and Next StepsThis EO mandates a substantial change in the federal government’s enforcement of civil rights laws, particularly with respect to employment, housing, and credit. Employers should anticipate the following:
Reduced Federal Enforcement: Agencies are directed to deprioritize and amend regulations that can impose disparate-impact liability, potentially reducing the risk of federal enforcement actions that are based solely on statistical disparities.
Regulatory Uncertainty: The EO requires a comprehensive review and potential amendment or repeal of existing regulations that rely on disparate-impact theories, which may result in significant changes to compliance obligations.
State Law Considerations: The EO contemplates federal preemption of state disparate-impact laws, which may lead to further legal challenges and changes at the state level.
Guidance on Merit-Based Practices: Employers may receive new federal guidance emphasizing merit-based hiring and promotion practices, with a focus on individual qualifications rather than group-based outcomes.
Employers should continue to monitor developments as agencies undertake the required reviews and issue new guidance. Employers should also consult with legal counsel under privilege to confidentially review their current policies and practices in light of the coming changes.
New Executive Order Targets Workplace Discrimination Law: Major Shift Away from Disparate Impact Liability
The latest Executive Order signed by President Trump on April 23, 2025, titled “Restoring Equality of Opportunity and Meritocracy,” eliminates disparate impact liability in federal employment policy. Learn how this change could impact workplace discrimination claims and DEI compliance.
It directs the Attorney General and the Equal Employment Opportunity Commission (EEOC), within 45 days of the order, to “assess all pending investigations, civil suits, or positions taken in ongoing matters under every federal civil rights law within their respective jurisdictions, including Title VII of the Civil Rights Act of 1964, that rely on a theory of disparate-impact liability…” It also directs other federal agencies to effectively do the same, some within 45 days and others within 90 days. And, the Attorney General and EEOC are directed to “formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.”
A Significant Shift in Workplace Discrimination Law
While framed as a return to merit-based employment practices, this sweeping Executive Order marks a significant change in how workplace discrimination claims—specifically disparate impact—will be evaluated under federal law.
But what does this mean for employees, employers, and HR professionals?
Let’s start with the basics:
Disparate Impact vs. Disparate Treatment Discrimination: What’s the Difference?
Under U.S. anti-discrimination laws—such as Title VII of the Civil Rights Act—two key legal theories are often used to prove unlawful discrimination:
Disparate Impact Discrimination
This occurs when a neutral workplace policy or practice disproportionately harms a protected group—even if there was no intent to discriminate.
Example:A company implements a height requirement for job applicants. While it appears neutral, it may disproportionately exclude women or individuals of certain ethnic backgrounds. That unintended effect can give rise to a disparate impact claim.
Key Characteristics:
Unintentional discrimination
Based on statistical outcomes
Often seen in hiring, promotions, or testing criteria
Disparate Treatment Discrimination
This is the more familiar form of discrimination—when an employer treats someone differently because of their protected status (race, gender, religion, etc.).
Example:A manager refuses to promote an equally qualified candidate because she is pregnant. This is direct and intentional discrimination.
Key Characteristics:
Intentional unequal treatment
Often easier to identify, but harder to prove without clear evidence
May involve overt bias or prejudice
What the Executive Order Changes:
The new Executive Order eliminates disparate impact liability in federal employment policy and regulations. This means:
Federal agencies, contractors, and regulated entities are no longer expected to analyze or correct practices that produce unequal outcomes unless intentional discrimination can be proven.
Title VI disparate impact regulations previously enforced by the Department of Justice have been revoked.
DEI initiatives that were built to proactively address disparate outcomes may now be legally vulnerable.
The rationale?The Order argues that disparate impact theory forces race-conscious practices, compelling employers to consider demographics over merit, which the administration believes is unconstitutional.
Implications for Employers and DEI Policies
This Order creates a new legal landscape:
Federal Contractors & Government Entities must review their compliance programs—especially those involving hiring, testing, and promotion criteria that previously considered statistical disparities.
Private Employers, though not directly bound, the Order may influence litigation trends and public expectations. Courts may become more skeptical of claims based solely on disparate impact.
Diversity, Equity, and Inclusion (DEI) Programs and strategies focused on closing outcome gaps could be seen as race- or gender-conscious decision-making, which may now face legal challenges.
Employee Protections where employees may find it harder to challenge facially neutral practices that have discriminatory effects, even when patterns of exclusion are evident.
This Executive Order represents a dramatic departure from decades of anti-discrimination enforcement. While the Order re-centers meritocracy as a guiding principle, it also narrows the avenues for challenging systemic inequality in the workplace. The effect of this Executive Order is a significant raising of the bar for employees alleging discrimination. Under the prior framework, a plaintiff could bring a successful claim by showing that a neutral policy disproportionately affected a protected group—even without proving intent.
Now, plaintiffs must prove intentional discrimination—a much more difficult standard. This shift:
Narrows the legal pathway for holding employers accountable for systemic inequities;
Requires evidence of overt bias or discriminatory motive, which is often concealed or subtle; and
Makes it harder to challenge institutional practices that may perpetuate inequality, even if no one person intended to discriminate.
In short, by eliminating disparate impact as a legal tool, the Executive Order removes a critical mechanism for addressing hidden or structural discrimination in the workplace. We will continue to monitor developments regarding the implementation of this Executive Order and its impact on this critical area of the employment law landscape.
Privacy Tip #441 – Identity Theft Statistics Increasing in 2025
Unfortunately, identity theft continues to increase, and according to Identitytheft.org, the statistics are going to get worse in 2025. Some of the statistics cited by Identitytheft.org include:
1.4 million complaints of identity theft were received by the Federal Trade Commission
Total fraud and identity theft cases have nearly tripled over the last decade
Cybercrime losses totaled $10.2 billion
The median loss to fraud victims is $500
There is an identity theft case every 22 seconds
33% of Americans faced some form of identity theft at some point in their lives
Consumers aged 30-39 were the most victimized by identity theft
Georgia ranked #1 for identity theft and fraud cases
Identitytheft.org concludes:
“Identity theft has been a growing problem in the U.S. for the past few years. It is difficult for victims to deal with these issues because theft methods are becoming even more sophisticated with time. Citizens must safeguard their personal information by utilizing technology such as antivirus protection software, password managers, identity theft protection, and VPNs if they want to avoid identity theft scenarios in 2025.”
These are helpful tips to consider.
Clocked In: FCC Seeks Clarity on Call Time Rules
In our previous alert, Tick-Tock, Don’t Get Caught: Navigating TCPA’s Quiet Hours, we discussed a growing wave of lawsuits targeting businesses under the Telephone Consumer Protection Act (“TCPA”) for allegedly sending text messages outside the Federal Communications Commission’s (“FCC”) designated 8:00 AM to 9:00 PM window. These suits often involve texts sent just minutes before or after the hour. Worse yet, these suits frequently target businesses whose customers had voluntarily opted into Short Message Service (“SMS”) programs. As we explained, under the plain language of the TCPA and the FCC’s rules, such messages should not be considered “telephone solicitations” at all, because the recipients gave prior express consent. As a result, they should not also be subject to the quiet hours rule.
Subsequently, the FCC took an important step that could clarify this issue. Recently, the FCC released a Public Notice seeking comment on whether the TCPA’s quiet hours apply to text messages sent with the recipient’s prior express consent. The Public Notice has drawn strong responses from both sides of the debate, including plaintiff’s attorneys, consumer advocacy groups, industry associations, and privacy-focused nonprofits. This development suggests that regulatory guidance could be forthcoming—but until then, litigation risk remains.
The FCC’s Public Notice
In its Public Notice, the FCC asked for input on whether its rules prohibit businesses from sending text messages for telemarketing purposes outside the 8:00 AM to 9:00 PM window, even if the message was sent with the consumer’s prior express consent. The FCC also invited comment on related issues in the alternative, including whether there is a non-rebuttable assumption that the NPA-NXX (i.e., the area code and local exchange of the called party) is indicative of the called party’s location when applied to wireless phone numbers.
Comments on the Petition
Several industry stakeholders filed comments supporting the petition. These commenters emphasize the plain language of the TCPA and the FCC’s own rules, which state a “telephone solicitation” does not include calls or messages made with the recipient’s prior express invitation or permission. Because the quiet hours restrictions apply only to “telephone solicitations,” the argument goes, messages sent with prior consent should be exempt by definition.
Supporters argue that requiring businesses to track the local time zone of each customer creates an unreasonable compliance hurdle, especially given the mobile nature of modern communications. Responsible Enterprises Against Consumer Harassment (“R.E.A.C.H.”) included data showing a month-over-month increase in the number of cases filed and warned that without FCC intervention, a growing number of class actions will exploit the ambiguity around this issue.
However, several organizations and law firms that regularly advocate for consumer protections filed comments opposing the petition. These commenters generally argue that the quiet hours rule applies to all marketing messages, regardless of consent, and that carving out an exception would undermine consumer privacy. For example, the Law Offices of Jibrael S. Hindi—a firm that has filed many of the recent lawsuits under this theory—opposed the petition. The firm claimed consumers may not expect to receive messages during early morning or late evening hours, even if they opted into a marketing program, and suggested consent should not extend to contact during quiet hours unless explicitly disclosed and agreed to. The National Consumer Law Center (“NCLC”) likewise encouraged the FCC to allow the issue to play out in the courts and argued against creating a presumption about quiet times based on the called party’s area code and local exchange.
What Comes Next
Now that the comment period has closed, the FCC will review the submissions and decide whether to issue a declaratory ruling. There is no set timeline for the Commission to act, and it may take several months (or longer) before any formal decision is issued. In the meantime, plaintiffs’ attorneys may continue filing lawsuits under the current ambiguity.
What Businesses Should Do in the Meantime
Until the FCC provides definitive guidance, businesses that engage in SMS marketing should consider the following steps to reduce legal exposure:
Respect the Quiet Hours: Even if you have a strong argument your messages are exempt, the safest course is to avoid sending marketing texts before 8:00 AM or after 9:00 PM in any time zone in the United States.
Audit Your Consent Process: Ensure your SMS terms clearly disclose the nature and timing of messages. Consider adding language that explains messages may be sent at any time, including early morning or evening hours.
Implement Time-Zone Safeguards: Use geolocation tools or other technology to manage time-zone targeting. Even if not legally required, this step can show a good-faith effort to comply.
Document Everything: Maintain records showing when and how a consumer provided consent, what disclosures were made, and when messages were sent.
Monitor FCC Activity: Stay informed on the status of the petition and any related FCC guidance. An eventual ruling could impact how these lawsuits are litigated and defended. Businesses in litigation may wish to consider filing motions to stay pending the outcome of the FCC petition.
Conclusion
The FCC’s request for comment is a welcome sign that regulatory clarification may be on the horizon. However, until that clarification arrives, businesses must continue to navigate the uncertain legal terrain. Stakeholders remain hopeful that the FCC will confirm what the statute and regulations already suggest: that messages sent with prior express consent are not “telephone solicitations” and are, therefore, not subject to the quiet hours rule. In the meantime, businesses should remain vigilant, stay within the safe harbor when possible, and consult legal counsel when designing or updating their marketing programs.
FDA Releases Results from Bottled Water PFAS Testing
FDA recently shared the final results from the testing of domestic and imported bottled water collected at retail locations across the U.S. for per- and polyfluoroalkyl substances (PFAS). Of the 197 samples of purified, artesian, spring, and mineral waters tested, ten samples had detectable levels of PFAS. However, none of those had levels that would have exceeded the EPA’s maximum contaminant levels (MCLs) for PFAS in public drinking water.
PFAS are a diverse group of widely used, long lasting chemicals that do not easily break down and can accumulate in the environment and human tissues with negative health consequences. PFAS have been the subject of various testing efforts, lawsuits, and legislation.
In the bottled water study, FDA tested for 18 types of PFAS, including the six types with EPA-established MCLs. The ten samples with detectable PFAS levels contained a range of one to four different PFAS in domestic samples and one to two different PFAS in imported samples. Of these, four PFAS were below EPA MCLs for drinking water, and two PFAS detected do not have established MCLs.
The Food, Drug, and Cosmetic Act requires FDA to establish a standard of quality regulation for contaminants in bottled water whenever the EPA establishes MCLs for public drinking water as part of a National Primary Drinking Water Regulation. If FDA does not establish a standard for the contaminants or finds that such standards are not necessary to protect public health, then the EPA levels are considered the applicable regulation for bottled water. FDA can then take action against bottled water that presents a safety concern even if there is no standard of quality for a contaminant.
Whither Discretionary Denials? Read the Tea Leaves, or Follow the Bread Crumbs? (Part II)
In Part I of this set of blogs, we discussed the impact of the rescission of former USPTO Director Vidal’s Guidance Memorandum for handling discretionary denials in inter partes review proceedings before the Patent Trial and Appeal Board. We also discussed Chief Judge Boalick’s Guidance Memorandum on the rescission.
In Part II, we examine a new interim procedure, instituted March 26, 2025, for briefing of discretionary denials. This new procedure radically changes how a patent owner whose patent is the subject of an IPR or post-grant review petition can raise discretionary denial issues prior to the PTAB’s decision whether to institute a proceeding. The new procedure bifurcates discretionary denial issues, including Fintiv issues, from merits and non-discretionary denial issues, and delegates to the USPTO Director the determination of whether to discretionarily deny a petition.
The Old Procedure
Previously, petitioners and patent owners would include discussion of discretionary denial issues as a small (sometimes very small) part of their 14,000 word limit for petition and preliminary response, with the remaining words devoted to the substantive merits or demerits of the petition. The petitioner would try to anticipate the patent owner’s arguments for discretionary denial. From time to time, the PTAB would grant the parties limited additional briefing on discretionary denial issues where, for example, the patent owner raised discretionary denial issues that the petitioner had not anticipated.
The New Procedure
Under the new interim procedure, a patent owner has 14,000 words (the same as in any IPR petition or responsive brief) to argue that discretionary denial is proper. The petitioner has 14,000 words to respond. The patent owner’s discretionary denial brief is due two months after the PTAB issues a Notice of Filing Date Accorded to the petition, and one month before the patent owner’s preliminary response (another 14,000 word paper) is due. The petitioner’s response (also 14,000 words) is due one month after the patent owner’s discretionary denial brief.
In the discretionary denial briefing, the parties are allowed to address all discretionary denial considerations as reflected in PTAB precedential decisions, including Fintiv(involving a parallel district court case), General Plastic(involving multiple petitions), and Advanced Bionics(involving previous prior art and/or arguments in the USPTO regarding the patent). The discretionary denial briefing also may include consideration of denial issues under 35 U.S.C. § 325(d).
In addition, discretionary denial considerations may include (Interim Procedure, p. 2):
Whether the PTAB or another forum has already adjudicated the validity or patentability of the challenged patent claims;
Whether there have been changes in the law or new judicial precedent issued since issuance of the claims that may affect patentability;
The strength of the unpatentability challenge;
The extent of the petition’s reliance on expert testimony (the PTAB has said that this factor is under consideration, and that guidance will be forthcoming);
Settled expectations of the parties, such as the length of time the claims have been in force;
Compelling economic, public health, or national security interests; and
Any other considerations bearing on the Director’s discretion.
The first bullet point is similar to Fintiv Factor 3 (how much work have the district court and the parties done on the validity of the claims in the IPR). The third bullet point is similar to Fintiv Factor 6 (which includes consideration of the merits of a petition). While the PTAB has not (yet) specifically commented on the fourth bullet point factor, this factor appears somewhat similar to Fintiv Factor 4 (overlap between issues raised in the petition and in the parallel proceeding).
In a recent discretionary denial of institution of an IPR petition in Motorola v. Stellar, the Acting Director found the Board erred in weighing the Fintiv factors, noting among other things that the petitioner’s invalidity expert report in the accompanying district court litigation basically repeated all of the arguments in the petition. This overlap in arguments was of concern because of the possibility that much of the work that would be done in the IPR to adjudicate validity would not alleviate the validity workload. For example, some of the invalidity positions in district court relied on prior art combinations in the IPR petition, plus some additional system art. The district court and the parties had done a lot of work on the case, having taken expert depositions and proceeded through claim construction and what appeared to be overlapping expert reports. Consequently, even though petitioner submitted a Sotera stipulation, the Acting Director denied institution.
The USPTO Director will work with three senior PTAB judges to decide whether to discretionarily deny a petition. If denied, no proceeding is instituted. If not denied, then a different PTAB panel will consider the petition on its merits, based on the petition and the patent owner’s preliminary response.
The Acting USPTO Director intends that this bifurcation of discretionary denial and merits considerations will reduce the PTAB’s workload.
No Briefing, No Discretionary Denial
At a Boardside Chat on April 17, 2025, the PTAB said that in order to have the Director decide whether to issue a discretionary denial, the patent owner must file a discretionary denial brief. Otherwise, the PTAB will proceed to determine whether to institute a proceeding on the merits. If the patent owner does not file a discretionary denial brief, the petitioner does not have to file one. Also, the Director will not address any discretionary denial factor (for example, any of the Fintiv factors) that the patent owner does not raise in its brief.
What About Merits?
At the Boardside Chat, the PTAB said that the discretionary denial briefing opportunity is not to be used for doubling up on merits briefing, even though merits consideration is one of the Fintiv factors. In the discretionary denial brief, it would be appropriate for the patent owner to comment briefly on merits — for example, to identify weaknesses in the petitioner’s case — and then refer to the forthcoming Patent Owner Preliminary Response (POPR) for more detailed discussion of the merits. Given the timing of petitioner reply to a discretionary denial brief and the POPR, it is expected that the Director will have recourse to merits briefing from both parties before deciding whether to discretionarily deny a petition. Patent owners should not necessarily count on the PTAB seeing any discussion of merits in the discretionary denial brief, so the patent owner’s preliminary response should contain all of the merits arguments that patent owners plan to make.
What About Timing?
There are two timing points of interest. One is that, if the patent owner files its discretionary denial brief before the two-month deadline, petitioner’s response deadline moves up accordingly. A second is that, if a petitioner wants to use the presence of a Sotera or a Sand stipulation as an argument against discretionary denial, the petitioner should file the stipulation within one month of the Notice of Filing Date Accorded. This early filing allows the patent owner to have a meaningful opportunity to address the stipulation in its discretionary denial brief.
What About Fee Refunds to Petitioner in the Event of Discretionary Denial?
Also at the Boardside Chat, the PTAB said that it still is discussing how to handle fee refunds in the event of discretionary denial.
What Recourse Do the Parties Have in Challenging Decisions on Discretionary Denial and/or Merits?
During the Boardside Chat, the PTAB identified three possible paths of recourse for parties to challenge institution (or non-institution) decisions:
Merits: Panel Rehearing Request
Discretionary Denial: Director Review Request
Merits + Discretionary Denial: Director Review Request
Takeaways
In addition to the items discussed here and in Part I of this blog, there have been significant resignations of APJs from the PTAB. In addition, the PTAB has been ordered to accelerate its work on appeals to the USPTO by over 40 percent. Since some PTAB judges handle both IPRs/PGRs and appeals, there will be an adverse impact on capacity to generate IPR decisions. As a result of all this, it seems likely that there will be more discretionary denials of IPR and PGR petitions going forward, and thus fewer merits decisions. In the short term at least, this approach may help with the Board’s workload. Longer term, it remains to be seen whether the increase in discretionary denials will continue as a part of Patent Office policy. A continued increase in discretionary denials could have a chilling effect on a patent infringement defendant’s willingness to file an IPR petition.
A New Era in Federal Sentencing: Updates to the Guidelines and the Elimination of Departures
The federal sentencing landscape in the United States could undergo a significant transformation with recent amendments to update the United States Sentencing Guidelines that will go into effect on November 1, 2025, unless Congress takes action to disapprove the amendments. These changes, which include the removal of departures, mark a pivotal shift in how justice is administered in federal courts. This article explores the implications of these updates, their impact on the judicial system, and what they mean for defendants, attorneys, and the broader legal community.
Background on the Federal Sentencing Guidelines
The Federal Sentencing Guidelines were established in 1987 by the United States Sentencing Commission (“USSC”) to promote consistency and fairness in sentencing. These guidelines provide a framework for judges to determine appropriate sentences for federal offenses, taking into account factors such as the severity of the crime and the defendant’s criminal history.
Historically, the guidelines allowed for “departures,” which enabled judges to deviate from the prescribed sentencing range under certain circumstances. Departures were intended to provide flexibility in cases where the guidelines did not adequately account for unique factors. However, the use of departures has been a subject of debate, with critics arguing that they undermine the consistency and predictability of sentencing.
Key Updates to the Federal Sentencing Guidelines
The recent amendments to the Federal Sentencing Guidelines represent a comprehensive overhaul aimed at addressing longstanding concerns and modernizing the sentencing process. The most notable change is the removal of departures, which has been replaced with a more structured approach to variances.
Elimination of Departures: The removal of departures reflects a shift towards greater uniformity in sentencing. Under the updated guidelines, judges will no longer consider departures from the prescribed sentencing range based on guideline specific criteria. Instead, the judges will consider variances that do not require a guidelines-sanctioned basis; they stem from judicial authority under Booker and its progeny and considerations of 18 U.S.C. § 3553(b)(1) factors (e.g., Irizarry v. United States, 553 U.S. 708 (2008)).
Simplification of the Sentencing Process: The updated guidelines introduce a streamlined “three-step” approach to sentencing, designed to simplify the process for judges and practitioners. The new three-step approach simplifies the sentencing process while maintaining fairness and transparency. Here’s how it works:
Step 1: Determine the Base Offense Level: Judges begin by identifying the base offense level for the crime, as outlined in the guidelines. This step ensures that the severity of the offense is accurately reflected in the sentencing range.
Step 2: Apply Adjustments: Next, judges apply any relevant adjustments, such as enhancements for aggravating factors (e.g., use of a firearm) or reductions for mitigating factors (e.g., acceptance of responsibility). These adjustments are designed to account for the specific circumstances of the case.
Step 3: Consider Variances: Finally, judges may consider variances based on statutory factors, such as the nature and circumstances of the offense and the history and characteristics of the defendant. Variances must be justified with detailed reasoning and are subject to appellate review to ensure consistency.
Enhanced Focus on Individualized Sentencing: The updated guidelines encourage courts to take an individualized approach to sentencing. Judges are urged to consider the unique circumstances of each case and defendant, within the framework of the guidelines.
Addressing Emerging Issues: The updates also address contemporary challenges, such as the rise of synthetic drugs and the use of firearms in criminal activities. New provisions have been added to ensure that sentences reflect the severity of these offenses and their impact on public safety.
Implications of the Updates
The removal of departures and the introduction of a more structured approach to variances have important implications for the federal judicial system:
Increased Consistency and Predictability: By eliminating departures, the updated guidelines aim to reduce disparities in sentencing and promote greater consistency across federal courts. This is expected to enhance public confidence in the fairness of the judicial system.
Challenges and Opportunities for Defense Attorneys: Defense attorneys will now focus more on individualized arguments when advocating for leniency on behalf of their clients. Although variances have been a driving force in federal sentencing since Booker, the focus on variances in sentencing will streamline arguments for reduced sentences. The criteria for variances require attorneys to present compelling evidence and arguments to justify deviations from the prescribed sentencing range, which provides opportunities and challenges.
Impact on Defendants: The emphasis on individualized sentencing provides an opportunity for defendants to present mitigating factors and make compelling arguments based on the individual circumstances of their case.
Judicial Training and Adaptation: The updates necessitate additional training for judges and legal practitioners to ensure a thorough understanding of the new guidelines. This includes familiarization with the criteria for variances and the streamlined sentencing process.
The Broader Context
The updates to the Federal Sentencing Guidelines reflect broader trends in criminal justice reform. In recent years, there has been a growing emphasis on evidence-based practices, transparency, and accountability in sentencing. These principles are at the heart of the updated guidelines, which seek to balance the goals of punishment, deterrence, and rehabilitation.
The removal of departures also aligns with efforts to address systemic disparities in sentencing. Studies have shown that discretionary departures can contribute to racial and socioeconomic disparities, as they may be influenced by implicit biases. By replacing departures with a more structured approach to variances, the updated guidelines aim to mitigate these disparities and promote equity in sentencing.
Looking Ahead
As the updated Federal Sentencing Guidelines take effect, their impact on the judicial system will become clearer. Legal scholars, practitioners, and policymakers will closely monitor the implementation of the guidelines and their outcomes. Key areas of focus will include:
Evaluating the Effectiveness of Variances: The success of the updated guidelines will depend on how effectively variances are applied in practice. This includes assessing whether the criteria for variances strike the right balance between flexibility and consistency.
Addressing Unintended Consequences: As with any major policy change, the updates may have unintended consequences that require further refinement. Ongoing feedback from judges, attorneys, and other stakeholders will be critical in identifying and addressing these issues.
Advancing Criminal Justice Reform: The updates to the Federal Sentencing Guidelines are part of a broader movement towards criminal justice reform. Continued efforts to promote fairness, transparency, and accountability in sentencing will be essential in building a more just and equitable system.
Conclusion
The revised Federal Sentencing Guidelines represent a significant step forward in the ongoing evolution of the criminal justice system. By emphasizing structured variances, evidence-based practices, and a commitment to equity, these updates pave the way for a more transparent and accountable approach to sentencing. As the legal community adapts to these changes, it is imperative to remain vigilant in evaluating their effectiveness and addressing any unforeseen challenges. Through continuous efforts and collaboration, the ultimate goal of fostering a fairer and more just judicial system can be realized.
EU Data Act Preparedness – Last Minute Fire Drill Exercise!
In less than six months, on 12 September 2025, most provisions of EU Regulation no. 2023/2854 (the EU Data Act) will go into effect. In light of the challenging compliance efforts, from legal and contractual points of view as well as from operational and product development perspectives, affected companies should act soon to avoid liability and administrative fines and to update their contractual frameworks.
The below checklist provides initial level guidance to assist in companies in assessming their risk exposure and identifying mitigation steps.
While the EU Data Act covers many different data-related topics, topics that are most relevant for private companies are obligations regarding collection and use of Internet of Things (IoT) data (Section 1) and switching between cloud storage/service providers (Section 2).
For IoT Companies
Does Your Company Manufacture Connected Products (Connected Products)?
Definition: Connected Products are all categories of equipment collecting data about their use or vicinity and are able to transfer this data via internet connection, also commonly referred to as “smart devices” or “IoT devices,” such as cars, televisions, refrigerators, cleaning or lawn mowing robots, kitchen tools, etc. (Source: Art. 2(5) EU Data Act)
Does Your Company Offer Related Services (Related Services) in Connection With Connected Products?
Definition: Related Services include any digital service (usually provided via an app) essential for the intended use of a Connected Product or adding additional functionalities to a Connected Product. (Source: Art. 2(6) EU Data Act)
Who Are Your Users?
Definition: If your Connected Products or Related Services are offered to customers in the European Union, the EU Data Act will apply to such product or service, regardless of whether your customers are consumers (B2C) or commercial (B2B) customers. (Source: Art. 1.3 EU Data Act)
Does Your Connected Product or Related Service Allow Users to Access Collected Product Data (Product Data)?
Definition: Product Data is all information collected by a Connected Product or Related Service in connection with using such product or service or its environment, regardless of whether such data is considered “personal data” under GDPR or not.
Action: Users have a right to have access to Product Data in real time, either directly in the IoT device or related app, or at least separately in a machine-readable format. Technical measures for enabling this access need to be implemented.
Action: Users must be provided with core information when purchasing a Connected Product or Related Service, e.g., regarding the types and amount of usage data collected, for what purposes the data will be used, where and how long the data is stored, and how the data can be accessed and stored. Information documents need to be prepared.
Action: Users may also request to grant third parties access to their Product Data. It is recommended to assess upfront under which, if any, conditions such disclosure may be rejected and on which grounds.
Does Your Company Use the Product Data for Its Own Purposes?
Action: Any use of this data for own purposes (e.g., analytics or business intelligence or advertisement) is only permitted under permission from the user of the Connected Product or Related Service to be given in a contract, including detailed provisions on the use and protective mechanisms. These contracts must follow a strict agenda and must contain certain mandatory terms. Existing customer agreements and new customer agreements will need to be updated accordingly before either 12 September 2025 (new contracts) or 12 September 2027 (for contracts executed prior to 12 September 2025 and (i) of indefinite duration or (ii) due to expire after 11 January 2034.)
Does Your Company Share Any of the Product Data With Third Parties?
Action: Product Data may be shared by your company with third parties only on the basis of a contract between the third party and the user in addition to the contractual relationship of your company with the user.. These contracts must follow a strict agenda and must contain certain mandatory terms. Agreements need to be put in place with users and third parties receiving usage data.
Does Your Company Currently Have Contracts in Place With Customers or Third Parties Entitling or Requiring Your Company to Access or Share Product Data?
Action: Existing agreements need to be reviewed for clauses regarding access to Product Data and, if such clauses exist, need to be updated to meet the above data sharing requirements.
For Cloud Storage/Service Providers:
Does Your Company Offer Cloud Services?
Definition: These are usually services enabling customers to upload their data to cloud servers; not only cloud infrastructure providers are covered, but each provider offering services around data hosting is covered, even if the cloud infrastructure is owned by another service provider.
Who Are Your Customers?
Definition: If your Connected Products or Related Services are offered to customers in the European Union, the EU Data Act will apply to your product or service, regardless of whether your customers are consumers (B2C) or commercial (B2B) customers.
Does Your Company Enable Customers To Migrate to Another Service Provider or Replace the Service With an On-Premises Solution?
Action: The EU Data Act obliges cloud service providers to remove obstacles that could deter customers from switching to another provider or an on-premises solution, regardless of the nature of the obstacle and including in particular contractual and technical obstacles. Service providers must assess if their service setup may raise such obstacles and, if necessary, remove these.
Action: Customer contracts must provide wording regarding the procedures, rights, and obligations of the parties for switching to another service provider, including termination and migration rights.
Action: Customer data must be maintained in a file format that can easily be transferred.
Does Your Company Charge Fees for Migrating Customer Data to Another Service Provider or an On-Premises Solution?
Action: From 12 January 2027 onward, cloud service providers must not charge any fees if the customer decides to migrate to another service provider or an on-premises solution. Until then, fees may not exceed the internal costs of the service provider arising in direct context with the migration.
The Cost of Waiting – Why You Need a Life Care Plan Now
Long-term care planning is something many families put off—until a crisis hits. Without a Life Care Plan, seniors and their families may face rushed decisions, financial hardship, and fewer care options when the need for care arises.
A Life Care Plan is a proactive strategy that helps seniors stay independent, protect their assets, and ensure they receive the care they need before an emergency forces their hand. The reality is that waiting too long to put a Life Care Plan in place can lead to higher costs, reduced choices, and unnecessary stress for loved ones.
The Rising Costs of Long-Term Care and Why a Life Care Plan Matters
Without a Life Care Plan, many families are shocked by the cost of care when a loved one suddenly requires assistance. According to Genworth’s 2024 Cost of Care Survey, the average national costs are:
In-home care (40 hours/week): ~$6,500/month
Assisted living facility: $4,500–$6,500/month
Nursing home (private room): $9,000–$12,000/month
Total dedicated costs for any of these can range from $70,000 to $130,000 depending on the location, the type of care, and the services offered.
In New Jersey, New York, and Pennsylvania, costs can be substantially higher. Seniors without a Life Care Plan risk spending their entire life savings on care, leaving their spouse or loved ones financially vulnerable. Proper Life Care Planning helps avoid this risk by incorporating Medicaid planning, asset protection, and long-term care strategies.
What Happens If You Wait Too Long to Create a Life Care Plan?
1. You May Lose the Option to Age in Place
A Life Care Plan prioritizes aging in place, helping seniors stay in their homes safely for as long as possible. However, without a Life Care Plan, staying at home may not be an option due to lack of resources and planning.
Home modifications like ramps, stairlifts, or bathroom upgrades require planning.
Many seniors assume Medicaid will cover in-home care, but Medicaid has strict eligibility requirements that must be planned for in advance.
Without a Life Care Plan, families may be forced to place a loved one in a nursing home or assisted living facility sooner than expected.
A well-structured Life Care Plan ensures seniors have the financial means and support systems in place to remain at home longer.
2. Lack of a Life Care Plan Could Lead to Financial Hardship
If you don’t put a Life Care Plan in place before you need care, you could be forced to pay for care out of pocket, depleting your assets much faster than anticipated. Some information to keep in mind:
Medicaid eligibility has strict financial rules. Without a Life Care Plan, seniors may be required to spend down their savings before qualifying.
Medicaid has a 5-year lookback period, meaning any asset transfers made within 5 years of applying could trigger penalties.
Nursing home care can cost over $200,000 per year—without a Life Care Plan, families often scramble to cover these costs at the last minute.
A Life Care Plan includes Medicaid planning, asset protection strategies, and trusts to legally preserve assets while ensuring affordable care options.
3. Without a Life Care Plan, Families Are Forced to Make Rushed Decisions
When families don’t have a Life Care Plan in place, they often find themselves in crisis mode when a loved one experiences a sudden health decline.
Without a Life Care Plan, families are left scrambling to find available care facilities which may not be the preferred choice.
Many nursing homes require a period of private pay before Medicaid kicks in, forcing families to spend down further if no planning has been done.
Families without a Life Care Plan may make costly mistakes, such as transferring assets or missing Medicaid eligibility requirements, leading to delayed care or financial penalties.
A Life Care Plan eliminates the stress of last-minute decision-making by mapping out care options, funding strategies, and legal protections ahead of time.
How a Life Care Plan Protects Your Future
A Life Care Plan is more than just a plan—it’s a roadmap to quality care, financial security, and peace of mind. By putting a Life Care Plan in place now, seniors can:
Remain independent longer – Planning allows for in-home care and modifications that support aging in place.
Avoid unnecessary financial loss – A Life Care Plan includes asset protection strategies to prevent Medicaid spend-downs.
Ensure loved ones aren’t burdened with decision-making – A Life Care Plan provides clear advice regarding legal, medical, and financial needs.
Qualify for Medicaid and VA benefits while protecting assets – Proper Life Care Planning ensures eligibility for government benefits without sacrificing financial security.
The Best Time to Create a Life Care Plan Is NOW
If you wait until a crisis occurs, your care choices will be limited, your expenses will be higher, and your family will be under unnecessary stress. The sooner you put a Life Care Plan in place, the more control you have over your care, your finances, and your future.
FDA Announces Phase-Out of What it Referred to as “Petroleum-Based Synthetic Food Dyes”
Yesterday, FDA and HHS announced a series of actions intended to phase out the use of petroleum-based synthetic food dyes. The news release can be found here and a video of the press conference here. Specifically, the agency announced that it would:
Establish a national standard and timeline to transition from petroleum-based dyes to natural alternatives.
Initiate the process to revoke authorizations for Citrus Red No. 2 (21 CFR 74.302) and Orange B (21 CFR 74.250).
Work with the industry to eliminate the remaining six synthetic dyes – Green No. 3, Red No. 40, Yellow No. 5, Yellow No. 6, Blue No. 1, and Blue No. 2 – from the food supply by the end of the year.
Authorize four new natural color additives – calcium phosphate, Galdieria extract blue, gardenia blue, and buttery fly pea flower extract (expanded uses) –in the coming weeks and accelerate the review and approval of others.
Partner with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development.
Request that companies remove Red No. 3 sooner than the previously required 2027-2028 deadline.
Speakers at the press conference included HHS Secretary Robert F. Kennedy Jr. and FDA Commissioner Marty Makary. Sweeping claims about the harms of the dyes, in particular to children, were made. Although the health effects of many of the dyes have been brought into question, there is little scientific consensus on the subject. See e.g., CA Department of Public Health Rejection of Synthetic Dye Warnings. FDA has not released any document providing an explanation for the agency’s change in position or providing a risk assessment to support its position. The speakers also discussed variations of state additive bans and the market harms of patchwork state regulation.
Neither the press release nor the news conference referenced any formal process to revoke the authorizations for the synthetic food dyes that are not Citrus Red No. 2 and Orange B, and FDA will likely rely on voluntary phase out by industry and state additive bans to implement its plans.
FDA Suspends Food Safety Quality Checks Amid Staff Cuts
The U.S. Food and Drug Administration (FDA) has recently suspended its food safety quality checks due to significant staff cuts at the Department of Health and Human Services (HHS). FDA had been drawing up plans in anticipation of the staff cuts, and outsourcing oversight to state and local authorities. This decision has raised concerns about the potential impact on public health and food safety standards.
FDA’s proficiency testing program, part of the Food Emergency Response Network (FERN), is designed to ensure consistency and accuracy in food testing laboratories. The network comprises approximately 170 labs that test food for pathogens and contaminants to prevent foodborne illness.
The suspension of this program follows the firing and departure of up to 20,000 HHS employees, including key personnel such as quality assurance officers, analytical chemists, and microbiologists. The program will be suspended at least through September 30, 2025.
The staff cuts have also impacted FDA’s work in other areas such as its bird flu response and drug reviews. FDA had already suspended efforts to improve testing for bird flu in milk, cheese, and pet food earlier in April due to staffing issues.
Defense Contractors’ Restrictions When Contracting with Chinese Companies
In the current economic climate, the obvious focus of many companies is on the administration’s imposition of tariffs. However, government contractors, especially those contracting with the U.S. Department of Defense (“DoD”), must not lose sight of their current and potential future direct and indirect relationships with certain Chinese entities.
Contractors’ compliance obligations regarding relationships with Chinese entities flow from:
FAR 52.204-25 (Section 889 of the 2019 National Defense Authorization Act (“NDAA”)), and
The Chinese Military Companies (“CMC”) List (Section 1260H of the 2021 NDAA) (also known as the “1260H List”).
Section 889 became effective in 2019 and 2020, so compliance policies and procedures applicable to contracting with all federal government agencies should be well in place. New complexities are emerging for defense contractors given the expanding number of Chinese entities on the1260H List. All contractors are required to annually certify compliance with Section 889, but defense contractors will have an additional level of compliance. They will be required to comply with the 1260H List beginning in June 2026 (for contractors that work with individuals or entities that lobby for CMCs) and June 2027 (for contractors sourcing from or otherwise doing business with entities on the 1260H list). We discuss both compliance frameworks below and provide several key takeaways for contractors.
Government-Wide Supply Chain Restrictions: Section 889
Parts A and B of Section 889 impose significant restrictions on a contractor’s ability to use and sell to the government covered telecommunications and video surveillance products and services (“covered equipment and services”) from five Chinese entities and their affiliates.
Part A, effective August 2019, prohibits the government from procuring covered equipment and services manufactured by the companies identified below. A prime contractor is required to flow down this prohibition to its subcontractors. Part B, effective August 2020, prohibits the government from contracting with entities that “use” covered equipment and services from the five identified companies. This prohibition applies to a contractor’s use of covered equipment and services in any part of its business. There is no nexus required tethering the use of such equipment or services to the contractor’s performance of a federal government contract. Part B does not flow down to subcontractors.
As U.S. government contractors are now well aware, compliance with Part B requires eliminating covered technology and services from their organizations from the five named Chinese entities and their affiliates, which typically include the following types of products/services:
Huawei: mobile phones, laptops, tablets, routers, and switches
ZTE Corporation: mobile phones, mobile hotspots, and network equipment (routers/switches)
Hytera Communications Corporation: radio transceivers and radio systems
Dahua Technology Company & Hangzhou Hikvision Digital Technology: video surveillance products and services (e.g., company surveillance systems)
DoD-Only Relationship Restrictions on Companies Listed on the Section 1260H List
The 2021 NDAA will add a second layer of compliance only for defense contractors. The Secretary of Defense is required to publish an annual list of CMCs. Starting in June 2026, DoD will be prohibited from procuring goods, services, and technology produced or developed by listed CMCs or companies that hire lobbyists that lobby for CMCs. Starting in June 2027, the same prohibition will apply to indirect procurements, meaning defense contractors must eliminate goods, services, and technology from listed CMCs from their supply chains.
To be included on the 1260H List, a Chinese entity must have one of two associations as determined by DoD. First, an entity must directly or indirectly (whether through ownership, control, or affiliation) act as an agent of the People’s Liberation Army; Chinese military or paramilitary elements; security, police, law, or border enforcement; the People’s Armed Police; the Ministry of State Security; or any other organization controlled by the Central Military Commission of the Communist Party, the Ministry of Industry and Information Technology, the State-Owned Assets Supervision and Administration Commission of the State Council, or the State Administration of Science, Technology, and Industry for National Defense. Alternatively, listed entities are those important to civilian and military advancements in China’s defense industrial base; these entities are called “military-civil fusion contributors.”
Whereas compliance regimes for Section 889 are nearly five years old, compliance deadlines for Section 1260H are upcoming:
Starting June 30, 2026, DoD may not (i) enter, renew, or extend contracts for goods, services, or technology with listed entities or their affiliates, or (ii) contract with companies that engage individuals or entities that lobby for CMCs, even if regulated “lobbying” activity does not relate to the contractor’s operations (Section 851 of the 2025 NDAA). (“Lobbying” is defined by the Lobbying Disclosure Act of 1995).
The prohibition differentiates between end-item technology and mere “components” of end item technologies. The prohibition focuses on end-items. (“Component” means an item supplied to the Federal Government as part of an end-item or of another component. 41 U.S.C. § 105.)
Starting June 30, 2027, DoD may not purchase end products or services developed or produced by listed entities indirectly through third parties. (Note an exception in Section 805 of the 2025 NDAA excluding the purchase of component materials that are part of an end product created by an entity not on the 1260H list.)
Section 1260H of the Fiscal Year 2021 NDAA required that DoD publish the 1260H List each year until at least 2030. Additional entities have been added each year thereafter. In an effort to provide contractors with ample notice, DoD has begun publishing 1260H Lists. As of January 2025, there are 134 entities on the list (Notice of Availability of Designation of Chinese Military Companies (Federal Register)). The listed entities span an array of industries, including telecommunications, aerospace, semiconductors, artificial intelligence, energy, and transportation, among others. Notably, Hangzhou Hikvision Digital Technology Co., Ltd. (Hikvision); Huawei Technologies Co., Ltd.; and Zhejiang Dahua Technology Co., Ltd. (Dahua) appear on both the Section 889 and Section 1260H lists.
Key Takeaways for Contractors
For Section 889 and Section 1260H compliance, U.S. government contractors must assess their supply chains both for direct contracts as well as contracting for end products or services developed or produced by listed entities indirectly through third parties on either list.
For purposes of Section 1260H, contractors must assess whether existing sourcing relationships involve “components” of end items (which are exempted) or end items themselves.
Further, contractors must conduct extensive due diligence to understand the agents working with them and on behalf of any listed entity to avoid running afoul of the restrictions on lobbying activity.
Contractors should actively monitor this space because more stringent restrictions may follow.