Implications of New “Secondary Tariff” Executive Order Targeting Importers of Venezuelan Oil

On 24 March 2025, the White House issued an Executive Order threatening to impose a 25% tariff on all goods imported into the US from any country that imports Venezuelan oil directly or indirectly through third parties. Effective on or after 2 April 2025, the tariff is in response to alleged actions of Venezuela’s Maduro government, in particular sending members of the Tren de Aragua gang (designated a foreign terrorist organization) and other criminals into the US and its involvement in kidnapping and violent attacks including the assassination of a Venezuelan opposition figure.
The 25% tariff—called a “secondary tariff” as it is analogous to “secondary sanctions” asserted against non-US entities for doing business with sanctioned parties and countries—will apply to “any country that imports Venezuelan oil, directly or indirectly, on or after 2 April 2025” as determined by the Secretary of State in consultation with the Secretaries of the Treasury, Commerce, and Homeland Security, and the US Trade Representative. Once imposed, the tariff would expire one year after a country ceases Venezuelan oil imports or earlier at the discretion of US officials. For countries already subject to other comprehensive import tariffs, the 25% tariff would be cumulative, so China, for example, could be subject to a 45% import duty including the 20% tariff that already applies.
The Order raises several questions, including the scope of products and transactions covered. “Venezuelan oil” is defined as “crude oil or petroleum products extracted, refined, or exported from Venezuela” regardless of the nationality of entities involved, and “indirectly” is defined to include purchases through intermediaries or third countries “where the origin of the oil can reasonably be traced to Venezuela.” This will put significant pressure to conduct and confirm the origin of petroleum products traded on the international market as a limited volume could trigger the tariffs. The Order also leaves the fate of refined and derivative products made from Venezuelan crude oil uncertain, suggesting that further processing and refinement in another country may still be subject to restriction. It is also unclear how Venezuelan oil commingled with oil from other countries would be treated. Presumably, such commingling would be assessed in the same manner as oil from embargoed countries under US sanctions regimes, where even a small amount of commingled product can taint an entire shipment. The Order leaves to Commerce responsibility to issue guidance on implementation of the measure.
Over half of Venezuelan oil exports are imported into China, with significant volumes purchased by France, India, Italy, and Spain under limited US authorizations that were previously granted. The tariff threat will lead to significant disruptions in these markets. The threat could also impact oil traders, shipping companies, and operators of storage facilities, with significant oil volumes becoming stranded without a viable buyer.

Important New Safe Harbors and Other Clarifying Changes to Delaware Corporate Law

The governor of the State of Delaware—consistent with his pledge to protect the “Delaware franchise”—recently signed into law amendments to Section 144 of the Delaware General Corporation Law (the DGCL) relating to certain acts or transactions involving directors, officers, controlling stockholders, and members of a control group, and Section 220 of the DGCL relating to stockholder demands for inspection of corporate books and records. 
The amendments to Section 144 are intended to provide greater predictability and clarity to Delaware corporations considering acts or transactions that may implicate the fiduciary duties of directors, officers, controlling stockholders, and members of a control group. The amendments to Section 220 are intended to provide clarity and certain limits on stockholder inspection of books and records given the increasing growth in volume and scope of stockholder actions for inspection brought in the Delaware Court of Chancery. 
Amendments to Section 144
The amendments to Section 144 provide safe harbor procedures for acts or transactions involving one or more directors, officers, controlling stockholders, and members of a control group that might, absent compliance with the safe harbor procedures, give rise to breach of fiduciary duty claims. The amendments to Section 144 also exculpate controlling stockholders and members of a control group from liability for duty of care violations. 
The safe harbor provided by amended Section 144 is protection from equitable relief or an award of damages by reason of a claim based on a breach of fiduciary duty. 
Safe Harbor for Acts or Transactions Solely Involving Directors or Officers
Acts and transactions involving one or more directors or officers or in which one or more directors or officers have an interest get the benefit of the safe harbor under amended Section 144(a) if:

The material facts as to the relationship or interest and the act or transaction are disclosed or known to all members of the board or a committee of the board and the act or transaction is authorized in good faith and without gross negligence by (i) the affirmative votes of a majority of the disinterested directors (see below) on the board (except where less than a majority of directors on the board are disinterested directors) or (ii) a majority of the disinterested directors on a committee (where less than a majority of the directors on the board are disinterested directors, the committee must consist of at least two disinterested directors), even though the disinterested directors constitute less than a quorum; or
The act or transaction is approved by an informed, uncoerced, affirmative vote of a majority of the votes cast by the disinterested stockholders (see below); or
The act or transaction is fair as to the corporation and its stockholders.

Safe Harbor for Acts or Transactions (Other Than Going Private Transactions)
Involving a Controlling Stockholder or Control Group. Acts or transactions between the corporation or one or more of the corporation’s subsidiaries on the one hand and a controlling stockholder (see below) or control group (see below) on the other hand and acts or transactions from which a controlling stockholder or control group receives a financial or other benefit not shared with the stockholders generally (each a Controlling Stockholder Transaction) get the benefit of the safe harbor under amended Section 144(b) if:

The material facts as to the Controlling Stockholder Transaction are disclosed or known to all members of a committee of the board (consisting of at least two disinterested directors) that has been expressly delegated by the board the authority to negotiate or oversee the negotiation of and reject the Controlling Stockholder Transaction and the Controlling Stockholder Transaction is approved or recommended for approval in good faith and without gross negligence by a majority of the disinterested directors then serving on the committee (Disinterested Committee Approval); or
The Controlling Stockholder Transaction is conditioned—by its terms (as in effect at the time it is submitted to stockholders for approval or ratification)—on approval or ratification by an informed, uncoerced, affirmative vote of a majority of the votes cast by the disinterested stockholders and such approval or ratification is obtained (Disinterested Stockholder Approval); or
The act or transaction is fair as to the corporation and its stockholders.

Safe Harbor for Going Private Transactions Involving a Controlling Stockholder or Control Group
A “going private transaction”—defined as a Rule 13e-3 transaction (for a corporation having a class of stock listed on a national securities exchange) or a Controlling Stockholder Transaction in which all of the capital stock held by disinterested stockholders is canceled, converted, purchased, or otherwise acquired or ceases to be outstanding (a Going Private Transaction)—gets the benefit of the safe harbor under amended Section 144(c) if:

The Going Private Transaction receives Disinterested Committee Approval and Disinterested Stockholder Approval; or
The act or transaction is fair as to the corporation and its stockholders.

Defining a “Controlling Stockholder,” “Control Group,” “Disinterested Director,” and “Disinterested Stockholder”
For purposes of applying the above safe harbor procedures, amended Section 144 defines the foregoing key terms as follows:
A “controlling stockholder” means a person that, together with affiliates and associates:

Owns or controls a majority in voting power of stock entitled to vote generally in the election of directors or in the election of directors having a majority in voting power of all directors; or
Has the right (by contract or otherwise) to cause the election of its nominees to the board and such nominees constitute a majority of all directors or a majority in voting power of all directors; or
Has the power functionally equivalent to that of a stockholder owning or controlling a majority in voting power of stock entitled to vote generally in the election of directors by virtue of ownership or control of at least 1/3 in voting power of stock entitled to vote generally in the election of directors or in the election of directors having a majority in voting power of all directors and power to exercise managerial authority over the corporation’s business and affairs. 
A “control group” means two or more persons that are not controlling stockholders but by virtue of “an agreement, arrangement, or understanding” between or among them constitute a controlling stockholder.
A “disinterested director” means a director who is not party to the relevant act or transaction and does not have a material interest in, or a material relationship with a person that has a material interest in, the relevant act or transaction. Amended Section 144 also contains a rebuttable presumption as to the “disinterestedness” of directors satisfying the independence criteria of the national securities exchange (modified as provided in amended Section 144) on which a class of the corporation’s shares are listed.
A “disinterested stockholder” means a stockholder that does not have a material interest in the relevant act or transaction or a material relationship with either the relevant controlling stockholder or a member of the relevant control group or any other person with a material interest in the relevant act or transaction. 

Defining a “Material Interest” and “Material Relationship”
Section 144 also defines the key terms “material interest” and “material relationship” as follows:

A “material interest” means an actual or potential benefit (including avoidance of a detriment), other than one devolving on the corporation or the stockholders generally, that (i) in the case of a director, would reasonably be expected to impair the objectivity of the director’s judgment when participating in the negotiation, approval, or authorization of the relevant act or transaction and, (ii) in the case of a stockholder or other person that is not a director or officer, would be material to the stockholder or other person. 
A “material relationship” means a financial, employment, familial, professional, or other relationship that (i) in the case of a director, would reasonably be expected to impair the objectivity of the director’s judgment when participating in the negotiation, approval, or authorization of the relevant act or transaction and, (ii) in the case of a stockholder, would be material to such stockholder.

Amendments to Section 220
The amendments to Section 220 define the scope of books and records that a stockholder may demand to inspect and set forth conditions that must be satisfied for the stockholder to inspect a corporation’s books and records. 
Scope of Books and Records That May Be Inspected by a Stockholder
Amended Section 220 generally defines the “books and records” of the corporation that a stockholder may inspect as the certificate of incorporation, bylaws, minutes of meetings (or consents in lieu of meetings) of stockholders (for the preceding three years) and the board or committees of the board, communications with stockholders generally (within the prior three years), materials provided to the board or committee in connection with action taken by the board or committee, annual financial statements (for the preceding three years), D&O questionnaires, and contracts made by the corporation with one or more current or prospective stockholders (or one or more beneficial owners of stock), in its or their capacity as such, entered into under Section 122(18) of the DGCL. 
Where the corporation does not have any minutes or consents of stockholders (for the preceding three years) or the board or committee, annual financial statements (for the preceding three years), or, in the case of a corporation having a class of stock listed on a national securities exchange, D&O questionnaires, the Delaware Court of Chancery may order the corporation to produce the functional equivalent of these books and records if the stockholder has complied with the conditions to inspection set forth in Section 220(b) and only to the extent necessary and essential to fulfill the stockholder’s proper purpose.
In addition, the Delaware Court of Chancery may order the production of other specific records if and to the extent (i) the stockholder has complied with the conditions to inspection set forth in Section 220(b), (ii) the stockholder has demonstrated a compelling need for the inspection of the records to further such stockholder’s proper purpose, and (iii) the stockholder has demonstrated by clear and convincing evidence that the specific records are necessary and essential to further the proper purpose.
Conditions to Stockholder Inspection
Amended Section 220(b) requires a stockholder demanding inspection of the corporation’s books and records to:

Make its demand in good faith and for a proper purpose (e.g., a purpose reasonably related to the stockholder’s interest as a stockholder); and 
Describe with reasonable particularity in its demand for inspection the stockholder’s proper purpose and the books and records sought to be inspected (which books and records must be specifically related to the stockholder’s proper purpose). 

Amended Section 220(b) expressly permits the corporation to:

Impose reasonable restrictions on the confidentiality, distribution, and use of the books and records inspected;
Require that the stockholder agree to incorporate information contained in the books and records inspected by the stockholder by reference in any compliant filed by or at the direction of such stockholder relating to the subject matter of demand; and 
Redact portions of the books and records not specifically related to the stockholder’s purpose. 

Effective Date of the Amendments
The amendments to Section 144 and Section 220 became effective upon signature by the governor on 25 March 2025 and apply to acts and transactions occurring before, on, or after such date, except for actions or proceedings that are completed or pending, or any demands for inspection made, on or before 17 February 2025.

UK Business Immigration – New Law on Right to Work Checks for Workers: Makes Sense in Principle but Tricky in Practice

The government has announced the latest instalment in its ‘crackdown’ on illegal working by extending right to work checks to businesses hiring gig economy and zero-hours workers. In principle, this is logical and reasonable – prevention of illegal working should rightly apply to anyone working in the UK regardless of their worker status label. However, any change in the law must be supported by carefully-drafted guidance (which hasn’t always been the case in this area). Many businesses who fall foul of the UK’s complex right to work rules are certainly not ‘rogue’ employers, but just in dire need of clear guidelines on what they need to do.
Under s.15 and s.21 of the Immigration, Asylum and Nationality Act 2006, employment of an adult subject to immigration control who does not have permission to work or is working in breach of their visa conditions exposes the employer to a civil penalty (currently set at a maximum of £60,000 per person) and/or a range of other sanctions including an unlimited fine, business closure, director disqualification and potential prison sentence of up to 5 years. S.25(b) IANA specifies that employment for these purposes is “employment under a contract of service or apprenticeship, whether express or implied and whether oral or written”. UK businesses are therefore currently only at risk of sanctions in relation to employees working illegally but the Home Office has been trying to close this loophole for some time.
In September 2024, the Home Office updated its Right to work checks: an employer’s guide to state: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse, but you must still carry out these checks (and retain evidence you have done so) to comply with your sponsor duties.”
As this appeared to conflict with the provisions of IANA, we contacted the Home Office to clarify what this wording meant for organisations who do not hold a sponsor licence. Wording later on in the same guidance states that employers are strongly encouraged to carry out checks even on those workers who are not employees and on contractors and labour providers but stops short of imposing any obligations.
In February just gone, the same part of the employer’s guide was amended to read: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse. However, you must still carry out these checks (and retain evidence you have done so) if you are a sponsor licence holder and are sponsoring the worker to ensure compliance with your sponsor duties.” In other words, no checks are required on workers, other than in circumstances where they are sponsored.
The government’s latest announcement will require it to change IANA and given the specific reference to gig economy and zero hours workers in the announcement, it will also need to give some careful thought to the following:

Will the changes only apply to gig economy and zero hours workers or to all other workers including agency workers and freelancers in any type of business? How do you define a ‘gig economy worker’?
Will employers be required to carry out checks on existing workers or just those hired on or after the date of implementation?
Will right to work checks apply to the genuinely self-employed and if not, how will employers, let alone the Home Office, differentiate them from workers? Dozens of decided cases around the gig economy, including at the highest levels within the UK legal system, have failed to come up with a definitive test for what separates a worker from the genuinely self-employed. There is also no definition at law of “gig economy”. So a business which uses outsourced labour faces a nearly impossible choice (maybe that’s the point — it’s hard to tell). It has to decide between (i) maintaining the line that its associates are fully self-employed and so their right to work compliance is not its responsibility on the one hand or (ii) doing the checks to avoid time at HM’s pleasure, so tacitly accepting that they are workers, which then pulls down upon itself all sorts of liabilities in relation to holiday pay, auto-enrolment contributions, minimum wage, etc., that it could perhaps otherwise have avoided. Damned either way, it seems.
Could we end up with a requirement to carry out checks on anyone who provides any sort of service for payment regardless of status – your plumber, builder, taxi driver etc? No doubt the Home Office would laugh at the idea as patently silly, as indeed it is, but that is the logical extension of these new requirements unless and until there is the clearest line drawn in law between who is covered and who is not – just saying “workers and gig economy people” won’t cut it for that purpose as what is covered by one is still being litigated and the other has no definition at all. It is also unclear whether there will be any overlap in law or principle with the tax position – for example, if the supply to you of a particular contractor is caught by IR35 (in other words, he is deemed to be doing work akin to that of an employee), would that mean that these new duties apply? Or if he is a sole trader working in his own name, do these new obligations depend on whether he can show that you are just one of a number of customers for his trade or profession or on how much work he does for you in a week, a month or a year? Will we see a resurgence of the issue of economic dependency? This all sounds a bit shrill, but unless there is proper clarity attached to these extended obligations, operating them will be a nightmare for employers. The line between worker and fully self-employed is extremely thin and can depend on relatively minute facts, the relevance of which could easily escape the average employer. The only completely safe course will be to make as many of those workers into Schedule E employees as possible, so putting the obligation to do the checks beyond argument but at the same time imposing significant costs and loss of flexibility on businesses. It is of course government policy to push as many people as it can into tax-paying employment (hence the proposal to drop worker status altogether in due course) so this may be seen as consistent with that direction of travel. The issue will be how much of a mess is created for employers in the meantime, and in the absence of that very clear guidance, the answer to that seems likely to be “far more than could ever have been thought necessary”.
Will the obligation still sit with labour providers to carry out checks on the employees it provides to its clients or will both parties need to carry out their own checks? If the latter, will both parties be liable for a civil penalty in the event of illegal working? We foresee some interesting contractual tussles over where that liability may fall as between the parties.

What action should employers take?
Although the planned changes appear to be aimed at employers which intentionally breach their immigration duties, all organisations with overseas workers are likely to be affected, since the Home Office has shown limited ability to distinguish effectively between the politically-essential “rogue employers” and those doing their best in a bewildering blizzard of law and guidance — compliance action and fines are often issued to well-intentioned and generally diligent sponsors which have unwittingly fallen foul of their increasingly byzantine immigration obligations. Of the hundreds of cases we have advised on (many of them for large, professional organisations), almost all arise out of a genuine oversight on the part of the employer, combined with an often understandable lack of awareness of the prevention of illegal working rules. Whilst ignorance is rightly not a valid defence to compliance, the UK immigration system remains complex and constantly changing. Employers should not assume for a moment that the stated focus on intentional breach will avail them in any way.
It’s not clear when the changes will be implemented but UK businesses which hire anyone who is not an employee should:

Consider the extent of their non-employed work force and the checks that are currently done on them
Review relevant right to work procedures and the resources needed to extend them to workers (and, potentially, the self-employed)
Given the Home Office’s ongoing ‘crackdown’, ensure that their right to work procedures (for the entire workforce, including employees) are clear, robust and effective

The UK’s right to work rules are not straightforward, nor the penalties for tripping over them trivial – training and legal support is a worthwhile investment.

Last Mile Logistics Comes to the End of the Road – Dei Gratia v Commissioner of Patents [2024] FCA 1145

In Dei Gratia Pty Ltd v Commissioner of Patents [2024] FCA 1145 (Dei Gratia), the Federal Court of Australia dismissed an appeal by Dei Gratia and confirmed the decision of the Commissioner of Patents to refuse the patent application for ‘last mile logistics’. The claimed invention purported to facilitate the delivery of goods from the last point in a distribution chain to end consumers. By selecting a preferred local outlet, customers would be able to overcome delivery issues such as the need to be at home at a specific time and the protection of perishable goods that have been left at doors in high temperatures.
The decision shed light on the difference between an invention that aims to advance computer technologies and new business and logistic methods. To be patentable, the invention must be a “manner of new manufacture.” In other words, it “must be more than an abstract idea; it must involve the creation of an artificial state of affairs where the computer is integral to the invention, rather than a mere tool in which the invention is performed.”
Submissions
Dei Gratia argued that its claim is not a mere idea to improve the delivery system, but rather a “practical implementation to achieve that idea.” It also contended that computerisation should not be limited to the improvement of the computer technology itself.
The Commissioner of Patents submitted that the claimed invention is not different from a regular business scheme implemented by generic and already known computer technologies and that “no new technology in the sense of improved functioning of computer equipment was involved.”
Decision
Section 18(1)(a) of the Patents Act 1990 defines invention as “any manner of new manufacture.” On the question of whether the claimed invention was, in fact, a manner of new manufacture, the court pointed out that although the application does not characterise the invention as a new “computer-implemented” idea, in substance it nevertheless places the computer as a central part of the logistic system, which would not function without the use of a computer. In this regard, both parties accepted that there would be no technical ingenuity involved in selecting modified delivery outlets.
In rejecting the application, the court made a clear distinction between an innovative scheme and patentable invention. As the claimed invention addressed a business problem (an improved logistics scheme), rather than a technical one, it was not patentable as it could not be characterised as a manner of new manufacture. The decision confirms that the implementation of the logistics scheme on a computer that does not involve any advance in computer technology is not patentable.

Second Circuit Clarifies ADA Standard on Reasonable Accommodations

Employers in New York, Connecticut, and Vermont should take note of a recent Second Circuit decision holding that an employee may still be entitled to a reasonable accommodation under the Americans with Disabilities Act (“ADA”) even if they can perform the essential functions of their job without accommodation.
In Tudor v. Whitehall Central School District, (2d Cir. Mar 25, 2025), a circuit court panel vacated a district court’s grant of summary judgment in favor of Whitehall Central School District (“Whitehall”) on a failure-to-accommodate claim. The employee, a teacher with a longstanding history of PTSD, had been granted an accommodation in 2008 allowing her to leave campus for short breaks during morning and afternoon “prep periods”—times when she otherwise would not have been responsible for overseeing students. In 2016, a policy change prohibited teachers from leaving campus during these periods. Whitehall later permitted a morning break and, at times, an afternoon break when coverage was available.
The case focused on the 2019–20 school year, when the employee was assigned to supervise students during the time she would ordinarily take her afternoon break. She continued to take the breaks without formal approval, which she testified heightened her anxiety due to concerns about violating school policy. She later filed suit, alleging that Whitehall failed to reasonably accommodate her disability in violation of the ADA. The district court granted summary judgment to Whitehall, reasoning that because the employee admitted during the proceedings that she could perform her job without the requested accommodation, she could not establish a required element of her claim.
The Second Circuit disagreed, emphasizing that the ADA does not require an employee to show that an accommodation is necessary—only that it is reasonable. To establish a prima facie case under the ADA, an employee must show that: (1) their employer is subject to the ADA; (2) they were disabled within the meaning of the ADA; (3) they were otherwise qualified to perform the essential functions of their job, with or without reasonable accommodation; and (4) their employer refused to make a reasonable accommodation (emphasis added). The Second Circuit held that the ability to perform the essential functions of the job without an accommodation does not foreclose an employee’s failure-to-accommodate claim. The statutory language protects employees who can perform their jobs “with or without” accommodation and obligates employers to provide reasonable accommodations unless doing so would impose an undue hardship.
In reaching this conclusion, the court relied on the ADA’s plain text and aligned itself with the majority of other circuits in rejecting the idea that an employee must show an accommodation is necessary to perform the essential functions of their job in order to be entitled to one. It reiterated that the ADA is a remedial statute that must be construed broadly to eliminate discrimination against individuals with disabilities, and to say that an accommodation must be necessary in order to be reasonable would run counter to this purpose. The Second Circuit did note, however, that Whitehall may still raise other defenses on remand, including whether the employee had a qualifying disability or whether the requested accommodation would have posed an undue hardship.
A key takeaway for Second Circuit employers is that the ADA requires them to consider and, where appropriate, provide reasonable accommodations—even when an employee can perform essential job functions without one.

Australian Mandatory Merger Clearance: Regime Details starting to Emerge – Government publishes Draft Determination, ACCC publishes Draft Guidelines

On 28 March 2025, the Australian Government (the Government) published its draft Determination providing the beginnings of detail about the acquisitions that are the subject of mandatory notification, some of the exceptions to notifications, the position regarding supermarket acquisitions and the draft notification forms.
On the same day, the Australian Competition and Consumer Commission (ACCC) published its draft merger process guidelines, following on from its earlier analytical, and transition guidelines.
This Insight is part of a series of publications designed to guide clients through the upcoming Australian mandatory merger clearance regime, as the details becomes available.
In Brief
Whilst this Insight focuses on the key definitions in the Government’s draft Determination, We will shortly publish additional articles focusing on the ACCC’s draft guidelines. The determination:

Confirms or defines the types of acquisitions that are the subject of the regime.
Clarifies that the test for whether an acquisition is to be notified is based on the turnover of the acquirer and the target – and no other measure.

It then clarifies that the relevant measure of turnover of each of the acquirer and the target is the current Goods and Services Tax (GST) Turnover of the relevant entity and connected entities (being associated entities and controlled entities).

As a practical matter, this means the following for parties seeking to enter into negotiations for mergers and acquisitions (M&A), including considering the broader meaning of “acquisition”, at an early stage of the proposed acquisition or deal:

The acquirer needs to, for the purposes of ACCC Notification, consider the turnover of itself and the target;
The acquirer needs to calculate the GST turnover for the 12 months up to the date of the signing (and notionally at the commencement of negotiations) of both itself, including connected companies, plus, the GST turnover of the target (and its connected entities in the case of acquisitions of shares), to seek to calculate the AU$200 million or the AU$500 million threshold;
The above calculation will also be relevant to the calculation of the AU$50 million or AU$10 million threshold; and
The acquirer needs to consider the market value of, or consideration for, all the shares or assets the subject of the transaction for assessment of the AU$250 million transaction value threshold.

The same assessment in respect of serial or creeping acquisitions is set out below.

It provides detail about exceptions from notification under the regime, namely acquisitions:

Of land in certain circumstances;
By liquidators/administrators etc;
In the context of succession; and
Of financial securities, exchange traded derivatives, in money lending situations and in trust circumstances.

Mandatory notifications in the case of acquisitions by Coles or Woolworths.
The information requirements in Notification Forms – short and long-form.

In More Detail
As previously mentioned, the Government recently released the exposure draft of the Competition and Consumer (Notification of Acquisitions) Determination 2025 (Determination) and related draft explanatory memorandum. 
Additionally, on 28 March 2025, the ACCC published its draft merger process guidelines, building on its earlier draft analytic guidelines and transition guidelines.
As clients are focused on what amounts to a notifiable acquisition and if a transaction is notifiable, and what information is required to be provided to the ACCC, this insight focuses on the Determination. We will shortly publish a follow-up insight focusing on the process of interaction with the ACCC both informally and once a formal application is made.
What is an Acquisition
The Determination confirms that acquisitions are mandatorily notifiable in the following circumstances:

The acquisition is of shares in the capital of a body corporate or assets;
The shares or assets are “connected with Australia”;
The acquisition satisfies the combined acquirer/target turnover test on the contract date or the accumulated acquired shares or assets turnover tests (set out in more detail below); and
The acquisition is not covered by the exceptions.

We elaborate on these issues below, apart from confirming that the term “assets” is very broad, including:

Any kind of property;
Any legal or equitable interests in tangible assets such as options for land, leases etc;
Any legal or equitable right that is not property or intangible assets such as intellectual property, goodwill etc;
Any interest in an asset of a partnership, or an interest in a partnership that is not an interest in an asset of the partnership; and
Interests in unit trusts and managed investment schemes.

What is an Acquisition That is “Connected to Australia”
An acquisition is notifiable if it meets the thresholds (below) and it is an acquisition of shares or assets connected with Australia. This means in relation to:

A share: the share is in the capital of a body corporate that carries on business in Australia or intends to carry on business in Australia; or
An asset that is an interest in an entity: the entity carries on business in Australia or intends to carry on business in Australia.

How the Turnover Tests are Assessed
General or Economy Wide Turnover
The general or economy wide turnover test for mandatory notification is as follows:

The acquirer or acquirer group and target have a combined Australian turnover of at least AU$200 million; and either
The Australian turnover of the target is at least AU$50 million (for each of at least two of the merger parties); or
The global transaction value is at least AU$250 million.

The Determination has clarified how the turnover is to be calculated:

In relation to the acquirer or target turnover test, if the sum of all of the following is AU$200million or more:

The current GST turnover of each of the principal party or acquirer, together with each connected entity of the principal party;
Where the target acquisition is in shares of a body corporate, the current GST turnover of the body corporate and each connected entity of the body corporate; and
Where the target is an asset, the current GST turnover of the target attributable to the asset,

AND

In relation to the target, the acquired shares or assets turnover test is the sum of all of the following is AU$50 million or more:

Where the acquisition is in shares in a body corporate, the current GST turnover of the body corporate together with the current GST turnover of each connected of the body corporate; and
Where the acquisition is of an asset, the current GST turnover of the target to the acquisition to the extent that is attributable to the asset.

In relation to the above:

Connected entity meaning an associated entity as per section 50AAA of the Corporations Act, and any entity controlled by the principal party as per section 50AA of the Corporations Act; and
Current GST turnover (which is well understood by business given it is used by business to report the value of their taxable and GST free supplies) has the same meaning as section 188-15 of A New Tax System (Goods and Services Tax) Act.

In relation to the assessment of the AU$250 million transaction value, an acquisition will meet this threshold if the greater of the following is AU$250 million or more:

The sum of all market values of all of the shares and assets being acquired as part of the contract or arrangement; or 
The consideration received or receivable for all of the shares and assets being acquired as part of the contract or arrangement.

As a practical matter, this means the following for parties seeking to enter into negotiations for M&A, including considering the broader meaning of “acquisition”, at an early stage of the proposed acquisition or deal:

The acquirer needs to, for the purposes of ACCC Notification, consider the turnover of itself and the target;
The acquirer needs to calculate the GST turnover for the 12 months up to the date of the signing (and notionally at the commencement of negotiations) of both itself, including connected companies, plus, the GST turnover of the target (and its connected entities in the case of acquisitions of shares), to seek to calculate the AU$200 million threshold;
The above calculation will also be relevant to the calculation of the AU$50 million threshold; and
The acquirer needs to consider the market value of, or consideration for, all the shares or assets the subject of the transaction.

Very Large Corporate Group Turnover
The very large corporate group turnover test for mandatory notification is as follows:

The acquirer or acquirer group (i.e. the principal acquirer party and each connected entity) have a combined Australian current GST turnover of at least AU$500 million; and
The Australian current GST turnover of the target (the same approach to the assessment being the same as above) is at least AU$10 million (for each of at least two of the merger parties).

The Assessment of Serial or Creeping Acquisition
An acquisition satisfies the AU$50 million or AU$10 million threshold for accumulated acquired shares or assets turnover test for notification if:

The acquisition is of shares or assets; and
The principal acquirer or each connected entity have acquired other shares or assets in the three years ending the date of entering into the agreement or arrangement; and
Both the current acquisition (of shares or assets) and the previous acquisition, related directly or indirectly to the carrying on of a business involving the supply or acquisition of the same or substitutable or otherwise competitive with each other (disregarding geographic factors or limitations); and
The acquisition of the previous shares or assets and the current shares or assets, if treated as a single acquisition would satisfy the AU$50 million or AU$10 million acquired shares or assets turnover test; unless
The current GST turnover of the target of the current acquisition (and as relevant connected entities) is less than AU$2 million.

Exceptions to the Requirement Make a Mandatory Notification
In addition to the exception to the requirement to notify in respect of acquisition of partial shareholdings that was included in the amending Act, the Determination sets out that acquirers are not required to notify in the following circumstances:
Certain Land Acquisitions

Land acquisitions made for the purposes of developing residential premises; and
Acquisitions by businesses primarily for engaging in buying, selling or leasing land, where the acquisition is for a purpose other than operating a commercial business on land (i.e. the exemption is for property development or operating a property development business rather than operating a commercial business on the premises).

Liquidation, Administration or Receivership

An acquisition by a person in the person’s capacity as an administrator, receiver, and manager, or liquidator (within the meaning of the Corporations Act).

Financial Securities

An acquisition that results from a rights issue, a dividend reinvestment and underwriting of fundraising or buybacks, or an issue of securities (as per the Corporations Act).

Money Lending and Financial Accommodation

An acquisition of shares or assets that is a security interest taken or acquired in the ordinary course of business of the person’s business of the provision of financial accommodation (as long as the person whose property is subject to the security interest is not an associate of the acquirer).

Nominees and Other Trustees

An acquisition of an asset, that is an interest in securities, by a person as a bare trustee, if a beneficiary under the trust has a relevant interest in the securities.

Exchange-Traded Derivatives

An acquisition of an asset in the form of exchange-traded derivative and if at the time, the derivative confers an equitable interest in a share or assets, the acquisition of that equitable interest.

Notification Requirements for Coles and Woolworths
The Determination requires Coles and Woolworths (major supermarkets) and connected entities to make a notification for any acquisition of shares or assets that results in:

Coles or Woolworths acquiring in whole or in part, a supermarket business (a supermarket business as defined in section 5 of the Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2024; or
Coles or Woolworths acquiring a legal or equitable interest in land (in whole or in part), either existing land that has a building with a gross lettable area of 700sqm or if it does not have an existing building, the land is 1,400sqm,

UNLESS

The acquisition is not the extension or renewal of a lease for land upon which Coles or Woolworths was already operating a supermarket on the land.

Notification Forms – Information and Documentary Requirements
The Determination sets out the requirements for each of Short-Form Notifications (for acquisitions that were unlikely to raise competition concerns) and Long-Form Notifications (for acquisitions that required greater consideration of their effect on competition).
The Determination sets out in more detail the requirements and form of each of these notification forms, but in brief, the following are required (identifying the additional requirements for long-form application):
Documents

The final or most recent version of the transaction documents (including sale and purchase agreements, heads of agreement, offer documents/letters of intent and any other agreements between the transaction parties related to the acquisition);
For each party, the most recent audited financial statements and income statements that relate to the supply of goods or services most relevant to the competition analysis; and
An organisational chart to show structure of ownerships of each party and connected entities.

In addition, for Long-Form Applications, documents from each of the parties prepared for or received by the Board, Board Committee, or equivalent (possibly Executive or senior leadership team), or the shareholders meeting within the three years prior to the date of the notification regarding:

The rationale for the acquisition, including the business case for the acquisition or divestment;
The assessment of acquisition including the valuation of the target; and
Industry reports, market reports etc provided to the Board or equivalent within the previous three years describing competitive conditions, competitors, market shares and business plans (unrelated to the acquisition).

Information

The party names, contact details and law firms representing the parties;
An overview of:

The goods or services supplied (or acquired) by the parties, including brands, most relevant to the acquisition;
The transaction or transaction structure;
The rationale for the acquisition;
The consideration for the acquisition; and
If relevant, any foreign filings relevant to the transaction.

Tables for each of the parties setting out:

Connected entities in each of the previous three years; and
Acquisitions made by the parties (including connected entities in each of the last three years);

Details of the competitive effects of the acquisition, including:

The relevant goods and services and the geographic areas in which they are supplied;
The other key suppliers of the goods/services; 
The markets that are affected and estimate of market shares (by volume, capacity or turnover in each of the previous three years); and
The contact details of the five closest competitors, five largest customers, five customers closest to the median spend of customers.

Additional Requirements for Long-Form Applications

Details regarding barriers to entry including:

The costs of entry or the infrastructure required to supply the relevant goods or services and time required to put these in place, as well as the extent of these costs that are sunk or not recoverable;
Other barriers such as access to inputs, intellectual property issues, legal and regulatory requirements, customer switching costs and time required to “win” contracts, and overall revenues to achieve minimum viable scale; and
The entry of new competitors, as well as the exits in the previous three years.

The long-form application requires significant additional information for different types of transactions – horizontal and vertical acquisitions etc.

Other relevant information, particularly:

Identifying any goodwill protection provisions and the reasons that these provisions are necessary to protect the goodwill of the purchaser.

The Government has foreshadowed additional Determination, with the Determination itself having “placeholders” regarding waiver applications and the Acquisition Register – which unfortunately will now not be progressed until after the Federal election.
We are happy to provide additional details on any of the above issues.
We will also shortly publish additional Insights focusing on the ACCC’s Guidelines.

WHEN GOOGLE FOLLOWS YOU TO THE DMV: Where Consent Gets Lost in the Traffic

Happy CIPA Sunday! What feels like a routine online interaction with your state could be something else entirely. Imagine for a moment that you’re renewing your disability parking placard online. It’s another government form to fill out from the comfort of your home. You input your personal information, including sensitive details about your disability, and click submit. You don’t realize that an invisible digital hand may reach through your screen (figuratively speaking), quietly collecting your most sensitive personal information. Isn’t that a scary thought? This isn’t the plot of the new season of Black Mirror (or is it?); it’s the allegation at the center of Wilson v. Google L.L.C., No. 24-cv-03176-EKL, 2025 U.S. Dist. LEXIS 55629 (N.D. Cal. Mar. 25, 2025).
Here, Plaintiff was just trying to renew her disability parking placard through California’s “MyDMV” portal when she allegedly fell victim to what her lawsuit describes as Google’s secret data collection. According to the Opinion, Plaintiff provided the DMV with her personal information, including disability information,” only to later discover that Google secretly used Google Analytics and DoubleClick embedded on the DMV’s website when she renewed her disability parking placard to collect her personal information unlawfully. Like millions of Americans, Plaintiff trusted that her interaction with a government agency would remain private. This information, Plaintiff alleges, was then used to generate revenue for its advertising and marketing business. If proven true, Google essentially eavesdropped on what should have been a private interaction between a citizen and her state government.
The following legal issues reveal the complex landscape of privacy law in America. Pliantiff’s lawsuit hinges on two critical privacy laws. First, the Driver’s Privacy Protection Act (“DPPA”) is a federal law designed to prevent unauthorized disclosure of personal information from DMV records. Second, the California Invasion of Privacy Act (“CIPA”) protects against “the substantive intrusion that occurs when private communications are intercepted by someone who does not have the right to access them.” Campbell v. Facebook, Inc., 951 F.3d 1106, 1118 (9th Cir. 2020). Initially, these laws weren’t crafted with the advancement of digital technology in mind. However, they’re now legal shields designed for a different era and being tested against surveillance technologies. Together, these laws create a safety net meant to protect our personal information, but are they strong enough to catch Big Tech’s increasingly sophisticated data collection methods?
Google’s defense strategy is smart and calculated to exploit procedural technicalities rather than addressing the fundamental privacy questions at stake. Their first move was to argue that the California DMV was a “required party” under Fed. R. Civ. P. 19. They asserted the entire case should be dismissed since the DMV couldn’t be joined (due to sovereign immunity). It’s a clever technical legal argument that, had it succeeded, could have created a precedent for tech companies to evade privacy lawsuits involving government websites. Judge Eumi K. Lee wasn’t buying it, though. She rejected Google’s argument, finding that dismissing Plaintiff’s claims outright “would be draconian, particularly because Plaintiff seeks other relief too—including damages.” Wilson, 2025 U.S. Dist. LEXIS 55629, at *7. The Court rightfully distinguished the case from Downing v. Globe Direct L.L.C., 806 F. Supp. 2d 461 (D. Mass. 2011), noting that, unlike in Downing, where a vendor was explicitly contracted to include advertising, Plaintiff had alleged that Google encourages website operators—including the DMV—to use Google’s tools to obtain personal information that Google uses for its own advertising business.
Conversely, regarding Plaintiff’s DPPA claim, Google had more success. The Court focused on a technical but crucial question: Did Google obtain Plaintiff’s personal information from a motor vehicle record? The Ninth Circuit had previously ruled in Andrews v. Sirius XM Radio Inc. that the DPPA does not apply when “the initial source of personal information is a record in the possession of an individual, rather than a state DMV.” Andrews v. Sirius XM Radio Inc., 932 F.3d 1253, 1260 (9th Cir. 2019). With this in mind, Judge Lee determined that because “the personal information that was allegedly transmitted to Google came from Plaintiff, it was not from a motor vehicle record.” Wilson, 2025 U.S. Dist. LEXIS 55629, at *11. This distinction creates a troubling loophole in privacy protection. Your data is protected when it sits in a DMV database, but it loses that protection when you’re transmitting it to the DMV. This is a seemingly minor distinction. Whether data was pulled from a DMV database or intercepted while being entered by a user made all the difference for Plaintiff’s DPPA claim, which was dismissed with leave to amend.
Isn’t this getting spicy? But here’s where the plot thickens. While Plaintiff’s DPPA claim stumbled, her state law claim under CIPA survived Google’s dismissal motion. Google had asserted it couldn’t be liable under CIPA because it was merely acting as a “vendor” for the DMV—an extension of the government website rather than a third-party eavesdropper. This is a fantastic assertion by Google’s defense team. Think of it as Google claiming to be the DMV’s trusted assistant rather than an uninvited guest at a private conversation. However, Judge Lee rejected this defense, noting that Plaintiff had sufficiently alleged that “Google intercepted and used her personal information for its own advertising services” and thus “did not act solely as an extension of the DMV.” Id. at *13. The Court further found that Plaintiff had adequately alleged Google acted “willfully” by detailing how Google “specifically designed” its tracking tools to gather information and “intentionally encourages” website operators to use its tools in ways that circumvent users’ privacy settings. Id. at *14. That kind of intentionality matters when pleading willfulness under CIPA.
In Google’s defense, Google tried to shield itself behind its terms of service, which allegedly prohibited websites from sharing personally identifiable information with Google. But Judge Lee noted that assertion created “a question of fact” that couldn’t be resolved at the pleading stage. Id. at *15. With this observation, the Court relied on Smith v. Google LLC, explaining that while “Google argues that judicially noticeable policy documents suggest that Google did not actually want to receive personally identifiable information and expressly prohibited developers from transmitting such data, this presents a question of fact that the Court cannot resolve at this stage.” Id. (quoting Smith v. Google, L.L.C., 735 F. Supp. 3d 1188, 1198 (N.D. Cal. 2024)). As a result, the message is clear…fine print in terms of service won’t necessarily provide legal cover for actual data collection practices if it occurs.
This case feels like déjà vu for privacy advocates because we’ve seen this before. Similar allegations were raised against LinkedIn in Jackson v. LinkedIn Corp., 744 F. Supp. 3d 986 (N.D. Cal. 2024). The parallels between these two cases are vastly similar, involving allegations that tech giants are harvesting sensitive data from DMV websites. Google even tried to use these similarities against Plaintiff, characterizing her allegations as “entirely boilerplate” and “almost identical to the same allegations” asserted against LinkedIn in the Jackson case. Wilson, 2025 U.S. Dist. LEXIS 55629, at *15. However, the Court rejected this argument too, noting that the similarity between the complaints does not render Plaintiff’s allegations conclusory, especially given that both cases challenge similar alleged conduct by two different advertising companies. Google tried to compare Byars v. Hot Topic, Inc., 656 F. Supp. 3d 1051 (C.D. Cal. 2023), where the Court criticized “copy-and-paste” privacy complaints filed in bulk. However, Judge Lee pushed back, emphasizing that, unlike in Byars, Plaintiff’s Complaint here includes “at least 48 paragraphs of detailed allegations specific to Google” and cannot be dismissed as generic boilerplate. Wilson, 2025 U.S. Dist. LEXIS 55629, at *16.
So what’s the takeaway? When you enter personal information into a government site, like renewing your vehicle registration or applying for a disability placard, it feels like a private exchange. But behind the screen, third-party tools might be collecting your data. It sounds like Black Mirror, but it’s essentially happening. It’s as if you’re filling out a paper form at the DMV counter, only to discover that a marketing executive is peering over your shoulder, taking notes on your personal information. The legal distinction between information stored in a government database and information you’re actively entering may seem arbitrary from a privacy perspective. But it creates a significant gap in legal protection.
As the case progresses, Plaintiff has been granted leave to amend her DPPA claim, and her CIPA claim will proceed. This case reminds us that data privacy isn’t just about keeping private things—well… private—it’s about controlling who knows what about us and how that information is used. With every click and keystroke, who else might be watching as you type?
As always,
Keep it legal, keep it smart, and stay ahead of the game.
Talk soon!

China’s National Intellectual Property Administration Releases 2025 Budget and Targets – Expecting Over 5 Million Patent Applications in 2025

On March 26, 2025, China’s National Intellectual Property Administration (CNIPA) released its 2025 budget (国家知识产权局2025年部门预算) listing performance targets. Some 2025 targets include:

receiving over 5.135 million invention and utility model patent applications;
lowering the examination period for invention patents to 15 months or less;
examining 2.026 million invention patent applications;
4,500 or more people will pass the patent agent qualification examination;
examining 5.97 million trademark applications; and
the average examination period for trademark registration will be 4 months or less.

In contrast, in the 2024 Budget, CNIPA expected to examine over 2.026 million patent applications with an examination period of less than 16 months and total new applications (including invention and utility model applications) was expected to be equal or greater than 4.79 million applications. As 1,044,777 invention patents were granted in 2024, that implies only a 51.6% grant rate for invention patents in 2024 (although the number of examined invention patent applications could be higher, implying a lower grant rate). Examination might be getting even tougher as Chinese statistics showed that the number of invention patents granted in the first two months of 2025 were down some 15%.

2025 CNIPA Patent Targets

2025 CNIPA Trademark Targets

The full text is available here (Chinese only).

Beltway Buzz, March 28, 2025

The Beltway Buzz™ is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C., could impact your business.

FMCS Cuts Staff Dramatically. Following through on President Donald Trump’s executive order, “Continuing the Reduction of the Federal Bureaucracy,” which we recently examined here at the Buzz, this week, the administration all but shut down the Federal Mediation and Conciliation Service (FMCS). FMCS is an independent agency established by the U.S. Congress in the Taft-Hartley Act of 1947 “to prevent or minimize interruptions of the free flow of commerce growing out of labor disputes, to assist parties to labor disputes in industries affecting commerce to settle such disputes through conciliation and mediation.” FMCS will reportedly retain approximately 15 employees—down from the 220 employees it maintained in 2024.
Personnel News. There were significant developments this week on the agency personnel front as President Trump seeks to install his political appointees at executive branch agencies. For example:

NLRB. Today, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, in a 2–1 decision, ruled that President Trump was permitted to remove Gwynne Wilcox, a President Biden–appointed member of the National Labor Relations Board (NLRB), whose five-year term expires on August 27, 2028. A lower-court judge had issued a decision preventing the president from removing Wilcox without cause, but today’s appellate court ruling lifts the injunction while the litigation proceeds. The case will likely reach the Supreme Court of the United States.
EEOC. President Trump nominated Andrea Lucas, currently the acting chair of the U.S. Equal Employment Opportunity Commission (EEOC), to another five-year term on the Commission. Lucas has served as a commissioner since 2020, and her current term will expire on July 1, 2025. The Commission currently consists of Lucas and Democratic Commissioner Kalpana Kotagal, with three vacancies.
OFCCP Director. President Trump appointed management-side attorney Catherine Eschbach to serve as the director of the Office of Federal Contract Compliance Programs (OFCCP). The position does not need Senate confirmation, so Eschbach will immediately replace Acting Director Michael Schloss. With the revocation of Executive Order (EO) 11246, OFCCP now only enforces affirmative action and discrimination laws related to veterans and workers with disabilities. According to some media reports, Eschbach will lead the effort at OFCCP to review already-submitted affirmative action plans for potential discrimination. Lauren B. Hicks and T. Scott Kelly have the details.
Workplace Safety Commissions. President Trump nominated Jonathan Snare to serve on the Occupational Safety and Health Review Commission. Snare was recently appointed deputy solicitor of labor and served in various positions within the DOL from 2003 to 2009. Additionally, the president nominated Marco Rajkovich Jr. to serve on the Federal Mine Safety and Health Review Commission (FMSHRC). Rajkovich chaired the FMSHRC during President Trump’s first term.
DOL Office of Disability Employment Policy. Julie Hocker has been nominated to serve as assistant secretary for disability employment policy at the DOL. Hocker previously served as commissioner of the Administration on Disabilities within the U.S. Department of Health and Human Services.

Republican Committee Chair Outlines Suggested Policy Priorities for New Secretary of Labor. Late last week, the Republican chairman of the House Committee on Education and the Workforce, Representative Tim Walberg (MI), sent a letter to Secretary of Labor Lori Chavez-DeRemer, outlining policy issues that the committee believes are ripe for action by the new secretary. The letter specifically recommends the withdrawal or rescission of several regulatory actions issued by the Biden administration, such as:

The Wage and Hour Division’s (WHD) final rules on overtime, independent contractors, tipped workers, and Davis-Bacon regulation, among others. Also singled out is the WHD’s proposed rule eliminating the subminimum wage for workers with disabilities (Rep. Walberg underscored the importance of withdrawal of this proposal in a separate letter sent this week).
The Occupational Safety and Health Administration’s (OSHA) final walkaround regulation and electronic injury and illness recordkeeping rule, as well as proposed rules relating to excessive heat in the workplace and emergency response.

Representative Walberg also encouraged “DOL to enforce its laws while providing robust compliance assistance to workers and businesses instead of continuing the enforcement-only approach taken by the Biden-Harris administration.” The administration’s first regulatory agenda will provide a roadmap of agency priorities when it is issued in June or July this summer.
House Committee Examines Opportunities to Amend FLSA. On March 25, 2025, the U.S. House of Representatives Committee on Education and the Workforce’s Subcommittee on Workforce Protections held a hearing entitled, “The Future of Wage Laws: Assessing the FLSA’s Effectiveness, Challenges, and Opportunities.” The hearing focused on ambiguous and outdated provisions in the Fair Labor Standards Act (FLSA) and how they could be updated for the modern economy and workforce. For example, legislators and witnesses discussed legislative options to simplify the calculation of an employee’s “regular rate” for purposes of calculating overtime pay as well as a familiar bill that would allow employees to choose paid time off or “comp time” instead of cash wages as compensation for working overtime hours. Witnesses also advocated for passage of both the Modern Worker Empowerment Act and Modern Worker Security Act, as well as the readoption of the Payroll Audit Independent Determination (PAID) program, a pilot program the DOL launched during the first Trump administration that allowed employers to self-report federal minimum wage and overtime violations, but terminated in January 2021, soon after former President Joe Biden came into office.
CHNV Parole Programs Terminated. On March 25, 2025, the U.S. Department of Homeland Security (DHS) published a notice terminating the parole programs for individuals from Cuba, Haiti, Nicaragua, and Venezuela (“CHNV parole programs”), “unless the Secretary [of Homeland Security] makes an individual determination to the contrary.” Individuals whose parole is terminated must leave the United States by April 24, 2025. According to the notice, the DHS estimates that 532,000 people have entered the country through these parole programs. Among other reasons for terminating the parole programs, the DHS concluded that they “exacerbated challenges associated with interior enforcement of the immigration laws.” Individuals from these countries who have Temporary Protected Status, as well as individuals residing in the United States pursuant to parole programs relating to Ukraine and Afghanistan, are not impacted by the notice. Evan B. Gordon, Daniel J. Ruemenapp, and Hera S. Arsen have the details.
One Person, One Vote. On March 26, 1962, the Supreme Court of the United States issued its pivotal decision in Baker v. Carr, which changed the process by which our political representatives are chosen. The issue concerned the drawing of legislative districts in Tennessee. At the time of the initial legal challenge, the population of urban districts had dramatically increased compared to rural districts. Plaintiff Charles Baker argued that by not redrawing or reapportioning the districts, Tennessee violated the Equal Protection clause of the U.S. Constitution because citizens in rural districts were overrepresented compared to those in the more populated urban districts. The case was initially dismissed as a “political question,” but the Supreme Court reversed, holding that apportionment of state legislatures is a justiciable matter. The decision in Baker v. Carr opened the door for a series of legislative malapportionment cases decided by the Supreme Court in the 1960s and formed the basis for the “one person, one vote” principle. But not everything about the case turned out great. The deliberations among the Supreme Court justices were so intense and exhausting that Justice Charles Evans Whittaker suffered a nervous breakdown and had to recuse himself from the case.

D.C. Circuit Rules Trump Can Remove Independent Agency Members Without Cause

On March 28, 2025, the U.S. Court of Appeals for the District of Columbia Circuit ruled that President Donald Trump likely has the authority to remove National Labor Relations Board (NLRB) member Gwynne Wilcox and Merit Systems Protections Board (MSPB) member Cathy Harris without cause.

Quick Hits

The D.C. Circuit Court ruled that President Trump likely has the authority to remove NLRB member Gwynne Wilcox and MSPB member Cathy Harris without cause, staying previous reinstatement orders from lower courts.
The ruling leaves the NLRB and MSPB without enough members to hear cases.
The decision addresses significant constitutional questions regarding the president’s power to remove members of independent agencies, boards, and commissions and Congress’s authority to restrict removal.

In a split decision, the D.C. Circuit stayed two rulings by federal district courts in Washington, D.C., that had reinstated NLRB member Wilcox and MSPB member Harris to their respective independent agencies. President Trump had removed Wilcox and Harris, both democratic appointees, earlier this year, leading them to file legal challenges.
Writing separate concurring opinions, Circuit Judges Justin R. Walker and Karen LeCraft Henderson found that the government was likely to succeed on the merits that the president, as the head of the executive branch, has the authority to remove members of both the NLRB and MSPB because the agencies wield “substantial executive power.”
“The forcible reinstatement of a presidentially removed principal officer disenfranchises voters by hampering the President’s ability to govern during the four short years the people have assigned him the solemn duty of leading the executive branch,” Judge Walker wrote in his concurring opinion.
While Judge Henderson agreed “with many of the general principles in Judge Walker’s opinion about the contours of presidential power under Article II of the Constitution,” she concluded “the government’s likelihood of success on the merits [was] a slightly closer call.” Additionally, she emphasized that the government had clearly shown that it would face irreparable harm if the stays were not issued.
The stays prevent Wilcox and Harris from serving as members of the NLRB and MSPB, leaving each of their agencies without a quorum to hear cases. The NLRB is a five-member board created by the National Labor Relations Act that enforces labor law through representation and unfair labor practice cases. The MSPB is a three-member bipartisan board adjudicating personnel and merit systems issues involving federal employees.
Circuit Judge Patricia Millett, issued a separate dissenting opinion sharply criticizing the appeals court for granting the stays and stripping the agencies of their quora that the district court orders had maintained, “leav[ing] languishing hundreds of unresolved legal claims.”
The Wilcox and Harris cases have raised fundamental constitutional and separation of powers questions over the president’s authority to remove members of independent agencies, boards, and commissions and Congress’s authority to restrict removal. The Trump administration has argued that provisions limiting the president’s removal power are unconstitutional and infringe the president’s authority as the executive.
However, a 1935 decision by the Supreme Court of the United States, in Humphrey’s Executor v. United States, upheld restrictions on the president’s authority to remove officers of certain types of independent agencies—in that case, a commissioner of the Federal Trade Commission.
Next Steps
The D.C. Circuit’s ruling supports the president’s ability to remove the governing members of independent agencies without cause, allowing President Trump to move forward with efforts to reshape the NLRB and other agencies. However, the stays are not a final decision, and the litigation remains ongoing. Given the significant constitutional issues, the case could ultimately be resolved by the Supreme Court.

NLRB Firing Decision Stayed; Board to Stay Without a Quorum

On March 28, 2025, the United States District Court of Appeals for the D.C. Circuit stayed the District Court’s order reinstating former National Labor Relations Board (“NLRB” or “Board”) Member Gwynne A. Wilcox.  The Board is again left without a quorum, which, under the National Labor Relations Act (“NLRA” or the “Act”), requires at least three members. See New Process Steel, L.P. v. NLRB, 560 U.S. 674 (2010).
As reported here, on March 6, 2025, a D.C. federal judge had reinstated Member Wilcox, finding that President Trump’s unprecedented firing violated Section 3(a) of the NLRA, which states that, “[a]ny member of the Board may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” 29 U.S.C. 153(a).
The D.C. Circuit did not include a majority opinion with its order, which simply indicated that “the emergency motions for stay be granted.”  Instead, the Court attached two concurring opinions (by Judge Justin Walker and Judge Karen Henderson, respectively) and one dissenting opinion (by Judge Patricia Millett).
The opinions focused on the constitutionality of Section 3(a)’s removal protections, grappling with Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020), Collins v. Yellen, 594 U.S. 220 (2021), and Humphrey’s Executor v. United States, 295 U.S. 602 (1935), to determine whether the NLRB exercises sufficient “executive power,” such that it might not be covered by the Humphrey’s Executor exception to presidential removal.  As referenced here, that decision affirmed Congress’ power to limit the president’s ability to remove officers of independent administrative agencies created by legislation.
As Judge Henderson indicated in her concurrence, the “continuing vitality” of Humphrey’s Executor might be in doubt after Seila and Collins, and the Trump administration will likely seek to overturn the decision through the Wilcox appeal.  In the interim, and possibly until the Supreme Court rules on this issue, the Board will remain without a quorum.  As reported here, while the NLRB indicated that it will function to the extent possible absent a quorum, employers can expect Board processes to move slowly and resolution of matters pending to be delayed.
We will continue to track the Wilcox litigation and its impact upon the NLRB.

What are the Odds that FanDuelDraftKingsBet365 Can Save Tax-Exempt Bonds?

A document leaked earlier this year and attributed to the House Ways and Means Committee included the repeal of tax-exempt bonds[1] as a source of revenue to help defray the cost of extending the provisions of the Tax Cuts and Jobs Act that otherwise will expire at the end of 2025.  Apoplexy ensued. 
This consternation is fueled by the notion that Congress has the untrammeled authority to prevent states, and the political subdivisions thereof, from issuing obligations the interest on which is excluded from gross income for federal income tax purposes.  This notion appears to ignore a line of precedent that culminated in making Bet365, DraftKings, FanDuel, et al. indistinguishably omnipresent. 
Curious?  Read on after the break. 

The concern that Congress has the unfettered right to proscribe the issuance of all tax-exempt bonds emanates from the U.S. Supreme Court’s (the “Court”) decision in South Carolina v. Baker.[2]  The Court held in that case that Congress violated neither the principles of intergovernmental tax immunity[3] nor the Tenth Amendment to the U.S. Constitution by enacting a prohibition against the issuance of tax-exempt bearer bonds. 
The portion of the Court’s opinion pertaining to the Tenth Amendment cited Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985), for the proposition that the political process establishes the limitations under the Tenth Amendment on Congressional authority to regulate the activities of the states and their political subdivisions.  Under this formulation of Tenth Amendment jurisprudence, the courts do not define spheres of Congressional conduct that pass or fail constitutional muster.  The Court concluded that the political process functioned properly in this instance and did not fail to afford adequate protection under the Tenth Amendment to South Carolina. 
The Court also rejected the contention that Congress had, in violation of the Tenth Amendment, commandeered the South Carolina legislature by prohibiting the issuance of tax-exempt bearer bonds and questioned whether the concept of anti-commandeering originally contained in FERC v. Mississippi, 456 U.S. 742 (1982), survived the Court’s decision in Garcia.       
Aside from the portion that dealt with the Tenth Amendment, Justice Antonin Scalia joined the opinion of the Court, and Chief Justice William Rehnquist concurred in the Court’s judgment but did not join the Court’s opinion.  In the view of Justices Rehnquist and Scalia, the Court should have upheld the prohibition against the issuance of tax-exempt bearer bonds because it had a de minimis effect on state and local governments, which would have ended the analysis under the Tenth Amendment.  They asserted that the Court’s opinion regarding the Tenth Amendment mischaracterized the holding of Garcia and unnecessarily cast doubt on whether the Tenth Amendment prohibits Congress from dictating orders to the states and their political subdivisions.     
Justice Sandra Day O’Connor dissented and stated that “the Tenth Amendment and principles of federalism inherent in the Constitution prohibit Congress from taxing or threatening to tax the interest paid on state and municipal bonds.”  In Justice O’Connor’s view, the prohibition against the issuance of tax-exempt bearer bonds intruded on state sovereignty in contravention of the Tenth Amendment and the structure of the Constitution.  This incursion would have negative effects on state and local governmental budgets and activities – effects she said that would only metastasize as Congress enacted further restrictions on the issuance of tax-exempt obligations, including, potentially, the elimination of such obligations.[4]      
Four years later, when confronted anew with an anti-commandeering question in New York v. United States,[5] the Court demonstrated that it was receptive to the argument that the protection of state prerogatives under the Tenth Amendment is not limited to the political process.  The Court held that Congress cannot compel a state government to take title to radioactive waste or, alternatively, assume liability for such waste generated within the state’s borders, because the Tenth Amendment forbids the issuance of orders by the federal government to the various state governments to carry out regulatory schemes adopted by the federal government. 
In her opinion for the Court in New York, Justice O’Connor developed the themes articulated in her dissent in Baker.  Namely, the Tenth Amendment was ratified to ensure that the federal government adhered to the federalist structure devised by the Constitution, a structure that contrasted starkly with the Articles of Confederation that the Constitution replaced.  Under the Articles of Confederation, the federal government had limited, if any, power to govern the citizens of the various states.  Instead, the Articles of Confederation constrained the federal government to acting upon the state governments, and state governments were the sole sovereign with respect to their citizens.  Under this constraint, the federal government could not tax the citizens; it could only issue requisitions to the state governments to raise funds. 
The federal government at that time did not possess the wherewithal to enforce the dictates and requisitions it had imposed upon the states.  As a result, the United States was hardly a cohesive whole.  The Constitution was ratified to create a more robust federal government and, thus, a truly unified United States.  Under the Constitution, the federal government may use the powers conferred upon it to directly govern the citizens.  Justice O’Connor observed that the Tenth Amendment guarantees adherence to the Constitutional structure, because it prohibits the federal government from issuing orders, dictates, and requisitions to the state governments, as the federal government could do under the Articles of Confederation.
The Court applied the foregoing rationale to hold in Printz v. United States[6] that the Tenth Amendment precludes the federal government from commandeering state officials to carry out a federal regulatory program.  The Court once again followed this rationale when it held in Murphy v. National Collegiate Athletic Association[7] that, where Congress had not prohibited sports gambling throughout the United States, the Tenth Amendment barred Congress from preventing a state legislature from enacting laws that permit sports gambling within the state.  As a result of Murphy, 39 states now allow sports gambling, and the FanDuelDraftKingsBet365 Borg has relentlessly endeavored to assimilate us.     
This durable line of Tenth Amendment precedent should give one pause before concluding that Congress can completely repeal the ability of state and local governments to issue tax-exempt bonds.  As noted above, a complete repeal of tax-exempt bonds is projected to generate $364 billion in revenue to the federal government over a 10-year period.  Under New York, Printz, and Murphy, Congress clearly cannot issue a requisition to the states seeking remittance of $364 billion to help finance a federal income tax cut.  The elimination of tax-exempt bonds is the economic equivalent of such a requisition by the federal government to the states and their political subdivisions.  State and local governments will be required to pay bondholders higher, taxable interest rates on debt obligations that they issue.[8]  If the projections noted above are accurate, $364 billion of this increased interest paid by state and local governments will be remitted by the bondholders to the federal government.[9] 
Does the Tenth Amendment allow the federal government to impose an indirect requisition on state and local governments that the federal government cannot issue directly?  Does the legal incidence of the tax on the bondholders suffice to avoid the anti-commandeering principle developed by New York, Printz, and Murphy?  If it does, would the Court distinguish its holding in Baker on the basis that prohibiting the issuance of tax-exempt bearer bonds has a trivial effect on state and local governmental sovereignty, while a full elimination has a much more profound effect?  If Congress eliminates tax-exempt bonds, will one or more states invoke the right of original jurisdiction[10] to present these questions directly to the U.S. Supreme Court? 
With all this on the table, it might be a bad bet to conclude that Congress can parlay the elimination of tax-exempt bonds into a revenue offset to help pay for a federal tax cut.                 

[1] The document scored the repeal of tax-exempt bonds as raising $250 billion over 10 years and the repeal of “private activity bonds” as generating $114 billion over the same timeframe.  The reference in that document to “private activity bonds” means “qualified bonds” under Section 141(e) of the Internal Revenue Code of 1986, as amended.  Qualified bonds are private activity bonds that would, absent legislative enactment by Congress, constitute taxable bonds.  Some common examples of qualified bonds include qualified 501(c)(3) bonds (which are frequently issued to finance educational, healthcare, and housing facilities owned or operated by 501(c)(3) organizations), exempt facility airport bonds (which are issued to finance improvements to terminals and other airport facilities in which private parties, such as airlines, hold leasehold interests or other special legal entitlements), and exempt facility qualified residential rental project bonds.  For ease, references to “tax-exempt bonds” in this post are to both tax-exempt governmental use bonds and tax-exempt qualified bonds.
[2] 485 U.S. 505 (1988).
[3] In so holding, the Court overruled Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429 (1895).  The Court in Pollock espoused the doctrine of intergovernmental tax immunity to conclude that the federal government lacks the authority under the U.S. Constitution to tax the interest on obligations issued by state or local governments.   
[4] Justice O’Connor was quite prescient. 
[5] 505 U.S. 144 (1992).  
[6] 521 U.S. 898 (1997). 
[7] 584 U.S. 453 (2018). 
[8] The Public Finance Network estimates that the repeal of tax-exempt bonds will raise borrowing costs for state and local governments by $823.92 billion between 2026 and 2035, which will result in a state and local tax increase of $6,555 per each American household. 
[9] It should be noted that taxing the interest paid on state and local debt does not, as some claim, result in an economic charge imposed on the wealthy.  As an initial matter, retirees and others of more modest means hold a significant amount of currently outstanding tax-exempt bonds, because they want to allocate a portion of their savings to a secure investment. Assuming arguendo that tax-exempt bondholders tend to be wealthier, they will be compensated for the tax in the form of increased interest rates.  They will suffer no economic detriment because their after-tax return on taxable state and local bonds will equal the return available on tax-exempt bonds.  State and local governments will, however, need to raise taxes or limit governmental services so that they can pay the higher interest rates demanded on taxable obligations.  Less wealthy constituents will bear the brunt of this.  The less wealthy tend to be the recipients of more governmental services than the wealthy.  Moreover, the less wealthy devote a larger share of their income to the payment of sales tax (the form of taxation on which state and local governments increasingly rely) than is the case with wealthier constituents.  Consumption taxes, such as sales taxes, are by their nature regressive, because the less wealthy spend a greater percentage of their income than do the wealthy, who can save a larger share of their income.  These savings are not subjected to a consumption tax.       
[10] U.S. Const. Art. III, Sec. 2.