Administrative & Regulatory – Page 8

Expungement and Reexamination Proceedings at the USPTO: Cost-Effective and Efficient Processes for Cancelling Trademarks

Businesses seeking to clear the path for their trademarks can challenge trademarks of others that are not genuinely in use. The U.S. Patent and Trademark Office (USPTO) expungement and reexamination proceedings provide businesses with tools to challenge such existing trademark registrations. The USPTO recently announced that it has successfully used such proceedings to clear more than 25,000 unused goods and services from the trademark register in 2024.
To maintain their registration, trademark owners are required to use their trademark in commerce for all the goods and services listed in the registration. However, when active trademark registrations include goods and services that no longer apply, they can block subsequent legitimate owners from registering the same or a similar mark.
Expungement and reexamination proceedings are two ways a party can challenge a registration due to nonuse in an attempt to cancel that registration. These proceedings are generally less expensive and more efficient than a formal cancellation proceeding before the Trademark Trial and Appeal Board (TTAB). If the request succeeds, the USPTO will delete those goods or services from the registration or cancel the registration altogether.
Expungement versus Reexamination
The type of proceeding depends on the particular facts. A party may institute an expungement proceeding if it can show that the owner never used the trademark in commerce with reference to some or all of the goods or services listed in the registration. Expungement is available for a registration based on use in commerce, a foreign registration, or the Madrid Protocol. Expungement must be requested between three and ten years after the trademark registration date.
On the other hand, a party may institute a reexamination proceeding if it can show that the owner did not use the trademark in commerce with reference to some or all of the goods or services listed in the registration on or before the relevant date required for showing proof of use. The “relevant date” is the date when the underlying application was initially filed based on use in commerce. When the underlying application was filed or amended to an intent-to-use basis, the “relevant date” is the date that an accepted amendment to allege use was filed or the end date of the statement-of-use period for an accepted statement of use. Reexamination must be requested within the first five years after registration.
How to Institute a Proceeding
To institute either an expungement or a reexamination proceeding, a party must submit the relevant form requesting that the USPTO institute a proceeding, including a verified statement, evidence supporting nonuse (such as past and current nonuse, fake or digitally altered specimens of use, or evidence of improper behavior that is relevant to nonuse), and a $400 fee per class of goods or services challenged. The trademark owner is notified and can submit a response. Aside from the original filing, no other documents are required. The USPTO will then consider all the evidence and make a determination. This process can take anywhere from four to twelve months.
For comparison purposes, the cost to institute a formal proceeding at the TTAB is $600 per class and can last up to three years. This does not include any legal fees incurred as a result of engaging in the adversarial proceeding, including motion filings and discovery.
Conclusion
In the past, if a registered mark were cited against an application based on a likelihood of confusion, the applicant could either respond with arguments as to why there was no likelihood of confusion or seek to cancel the registered mark. The expungement and reexamination proceedings give applicants another avenue for overcoming this type of refusal.

The CIO-CMO Collaboration: Powering Ethical AI and Customer Engagement

The rapid advancement of artificial intelligence (AI) technologies is reshaping the corporate landscape, offering unparalleled opportunities to enhance customer experiences and streamline operations. At the intersection of this digital transformation lie two key executives—the Chief Information Officer (CIO) and the Chief Marketing Officer (CMO). This dynamic duo, when aligned, can drive ethical AI adoption, ensure compliance, and foster personalized customer engagement powered by innovation and responsibility.
This blog explores how the collaboration between CIOs and CMOs is essential in balancing ethical AI implementations with compelling customer experiences. From data governance to technology infrastructure and cybersecurity, below is a breakdown of the critical aspects of this partnership and why organizations must align these roles to remain competitive in the AI-driven world.
Understanding Ethical AI: Balancing Innovation with Responsibility
Ethical AI isn’t just a buzzword; it’s a guiding principle that ensures AI solutions respect user privacy, avoid bias, and operate transparently. To create meaningful customer experiences while addressing the societal concerns surrounding AI, CIOs, and CMOs must collaborate to design AI applications that are innovative and responsible.
CMOs focus on delivering dynamic, real-time, and personalized interactions to meet rising customer expectations. However, achieving this requires vast amounts of personal data, potentially risking violations of privacy regulations like the General Data Protection Regulation and the California Consumer Privacy Act. Enter the CIO, who ensures the technical infrastructure adheres to these laws while safeguarding the organization’s reputation. Together, the CIO and CMO can delicately balance between leveraging AI for customer engagement and adhering to responsible AI practices.
The Role of Data Governance in AI-Driven Strategies
Data governance is the backbone of ethical AI and compelling customer engagement. CMOs rely on customer data to craft hyper-personalized campaigns, while CIOs are charged with maintaining that data’s the security, accuracy, and ethical usage. Without proper governance, organizations risk breaches, regulatory fines, and, perhaps most damagingly, a loss of trust among consumers.
Collaboration between CIOs and CMOs is necessary to establish clear data management protocols; this includes ensuring that all collected data is anonymized as needed, securely stored, and utilized in compliance with emerging AI content labeling regulations. The result is a transparent system that reassures customers and consistently delivers high-quality experiences.
Robust Technology Infrastructure for AI-Powered Customer Engagement
For AI to deliver on its promise of customer engagement, organizations require scalable, secure, and agile technology infrastructure. A close alignment between CIOs and CMOs ensures that marketing campaigns are supported by IT systems capable of handling diverse AI workloads.
Platforms driven by machine learning and big data analytics allow marketing teams to create real-time, omnichannel campaigns. Meanwhile, CIOs ensure these platforms integrate seamlessly into the organization’s technology stack without sacrificing security or performance. This partnership allows marketers to focus on innovative strategies while IT supports them with reliable and forward-thinking infrastructure.
Cybersecurity Challenges and the Integrated Approach of CIOs and CMOs
Customer engagement strategies powered by AI rely heavily on consumer trust, but cybersecurity threats lurk around every corner. According to Palo Alto Networks’ predictions, customer data is central to modern marketing initiatives. However, without an early alignment between CIOs and CMOs, the organization is exposed to risks like data breaches, compliance violations, and AI-related controversies.
A proactive collaboration between CIOs and CMOs ensures that potential vulnerabilities are identified and mitigated before they evolve into full-blown crises. Measures such as end-to-end data encryption, regular cybersecurity audits, and robust AI content labeling policies can protect the organization’s digital assets and reputation. This integrated approach enables businesses to foster lasting customer trust in a world of increasingly sophisticated cyber threats.
Case Studies: Successful CIO-CMO Collaborations

Case Study 1: A Retail Giant’s TransformationOne of the world’s largest retail chains successfully transformed its customer experience through the CIO-CMO collaboration. The CIO rolled out a scalable AI-driven recommendation engine, while the CMO used this tool to craft personalized shopping experiences. The result? A 35% increase in customer retention within a year and significant growth in lifetime customer value.
Case Study 2: Financial Services LeaderA financial services firm adopted an AI-powered chatbot to enhance its customer service. The CIO ensured compliance with strict financial regulations, while the CMO leveraged customer insights to refine the chatbot’s conversational design. Together, they created a seamless, trustworthy digital service channel that improved customer satisfaction scores by 28%.
These examples reinforce the advantages of partnership. By uniting their expertise, CIOs and CMOs deliver next-generation strategies that drive measurable business outcomes.

Future Trends in AI, Compliance, and Executive Collaboration
The evolving landscape of AI, compliance, and customer engagement is reshaping the roles of CIOs and CMOs. Here are a few trends to watch for in the coming years:

AI Transparency: Regulations will increasingly require companies to disclose how AI models were trained and how customer data is used. Alignment between CIOs and CMOs will be vital in meeting these demands without derailing marketing campaigns.
Hyper-Personalization: Advances in machine learning will allow marketers to offer even more granular personalization, but this will require sophisticated data-centric systems designed by CIOs.
AI Content Labeling: From machine-generated text to synthetic media, organizations must adopt clear labeling practices to distinguish between AI-driven and human-generated content.

By staying ahead of these trends, organizations can cement themselves as leaders in ethical AI and customer engagement.
Forging a Path to Sustainable AI Innovation The digital transformation of business will continue to deepen the interconnected roles of the CIO and CMO. These two leaders occupy the dual pillars required for success in the AI era—technology prowess and customer-centric creativity. By aligning their goals and strategies early on, they can power ethical AI innovation, ensure compliance, and elevate customer experiences to new heights.

H-1B Visas: Will Trump 2.0 Be a Turning Point for Employers Needing Skilled Foreign Workers?

Takeaways

A second Trump administration may align U.S. immigration policy with U.S. workforce needs on this particular aspect more than the first one did.
Despite limitations, the H-1B visa program has been instrumental in sustaining U.S. dominance in technology and innovation.
Employers will need to stay on top of potential changes to the program.

EnforceMintz —Could the Supreme Court’s Decision in Jarkesy Mean the End to HHS Civil Monetary Penalty Authorities as We Know Them?

Last June, the Supreme Court issued its decision in Securities and Exchange Commission v. Jarkesy, which holds that the Seventh Amendment entitles a defendant to a jury trial when the Securities and Exchange Commission (SEC) seeks to impose civil monetary penalties (CMPs) for a securities fraud violation. While the Jarkesy decision focused on the SEC’s administrative process, enforcement actions involving CMPs brought by other federal agencies, such as the Department of Health and Human Services (HHS), also proceed through an agency tribunal as opposed to a jury trial. In particular, the Centers for Medicare & Medicaid Services (CMS), which is part of HHS, has the authority to issue CMPs in countless circumstances.
As of the date of this article, we are not aware of any federal court case that specifically challenges HHS’s administrative CMP process, but parties are starting to assert Jarkesy-based arguments in appealing HHS administrative actions. For example, in November, the HHS Departmental Appeals Board (DAB) issued a decision on an appeal filed by a skilled nursing facility (SNF) that raised Jarkesy-based arguments. The SNF had challenged an administrative law judge’s (ALJ) decision to grant summary judgment in favor of CMS in a case where CMS imposed a CMP of $1,103 per day for 109 days of noncompliance with certain Medicare participation requirements. In pertinent part, the SNF moved for the DAB to remand and refund its CMP. The SNF argued that, based on Jarkesy, the ALJ proceeding to review the imposition of CMPs was “void ab initio,” that the ALJ did not have the constitutional authority to conduct its review, and that the CMP appeal should have been heard before a jury.
Ultimately, the DAB vacated the ALJ’s decision and remanded the matter for further proceedings consistent with the DAB’s decision. Notably, however, the DAB rejected the SNF’s Jarkesy arguments because (i) the SNF’s case concerns “an entirely separate statutory authority and regulatory scheme…as administered by [HHS],” (ii) Jarkesy does not apply to the Medicare administrative appeal regime, and (iii) the Supreme Court did not hold that every agency’s attempt to impose and support CMPs necessarily is a suit at common law that must be adjudicated by an Article III court (a point that was key to the Supreme Court’s decision). The DAB also emphasized that it is not the DAB’s role to invalidate any part of the Social Security Act or its implementing regulations. This point was consistent with the DAB’s longstanding approach that ALJs may not declare a statute or regulation to be unconstitutional or refuse to apply or follow a statute or regulation on that basis.
Surely, this proceeding will not be the last time the agency encounters a Jarkesy-based argument. It is only a matter of time before the question of whether and how Jarkesy applies to HHS’s CMP authorities finds its way before the courts. If such a challenge were to succeed, it could upend the agency’s enforcement process as we know it and lead to seismic shifts in the types of enforcement matters HHS prioritizes and pursues. For now, we imagine that HHS (and other agencies) are likely reviewing their CMP procedures and reliance on ALJs to oversee these proceedings for Jarkesy-related vulnerabilities.

EnforceMintz — Long Tail of Pandemic Fraud Schemes Will Likely Result in Continued Enforcement for Years to Come

In last year’s edition of EnforceMintz, we predicted that 2024 would bring an increase in False Claims Act (FCA) enforcement activity related to COVID-19 pandemic fraud. Those predictions proved correct. The COVID-19 Fraud Enforcement Task Force (CFETF), in conjunction with five COVID Fraud Enforcement Strike Forces and other government agencies, has resolved many significant criminal and civil pandemic fraud cases over the past year. In April 2024, the CFETF released a COVID-19 Fraud Enforcement Task Force 2024 Report (the CFETF Report) describing the CFETF’s recent efforts and including a plea for more fraud enforcement funding, which suggests that additional enforcement activity is on the horizon. While that funding request has thus far gone unheeded, we expect more civil pandemic fraud enforcement actions (and continuing criminal actions) in 2025.
Civil and Criminal Paycheck Protection Program (PPP) Fraud Enforcement
Since 2020, criminal PPP fraud has dominated COVID-19 fraud enforcement headlines, and 2024 was no different. Criminal fraud schemes have concerned common fact patterns involving fraudsters who (i) obtained funding to which they were not entitled, (ii) submitted false certifications or inaccurate information in a loan application, or (iii) submitted false certifications or inaccurate information in seeking loan forgiveness. However, in the past year, civil PPP fraud enforcement has begun to evolve.
In 2024, criminal PPP fraud enforcement broke up multiple COVID-19 fraud rings involving actors who fraudulently obtained loans for fictitious businesses, packed PPP applications with false documentation (provided in exchange for kickbacks), and falsely certified information regarding the number of employees and payroll expenses that would entitle them to PPP funding. Typical charges in these cases included wire fraud, bank fraud, making false statements to federally insured financial institutions, conspiracy, and money laundering.
On the civil side, PPP fraud enforcement seemed to increase in 2024. Interestingly, some civil PPP fraud cases involved schemes similar to criminal actions. Often the government’s decision to pursue such cases as civil, criminal, or both depends on the evidence of intentional fraud. For example, in January 2024, a clinic and its owners agreed to a $2 million judgment in connection with multiple fraudulent acts, including PPP fraud arising from their certification that they were not engaged in illegal activity and that their business suffered quarterly or year-over-year losses, therefore entitling them to PPP funding. In October 2024, one FCA recovery totaling $399,990 involved a home health agency and its owner who received two PPP loans after certifying that the company would receive only one. More recently, in December 2024, a private asset management company and its owner agreed to pay $680,000 to settle FCA allegations brought by a relator. The company and its owner allegedly falsely certified that PPP loans were economically necessary and included false statements in the information submitted when seeking forgiveness for the loan. Cases of this nature apparently did not rise to the level of criminal wrongdoing, in the government’s view.
A number of civil PPP fraud FCA cases from the past year involved increasingly complex theories and allegations. These more complicated fact patterns require years of investigation and are expensive. As a result, such fraud enforcement actions may have a “long tail” and continue for years to come.
For example, in May 2024, a private lender of PPP loans agreed to resolve allegations that it knowingly awarded inflated and fraudulent loans to maximize its profits, then sold its assets and bankrupted the company. The lawsuit was initiated by whistleblowers (known under the FCA as “relators”), including an accountant and former analyst in the lender’s collection department. As part of the settlement with the lender, the United States received a general unsecured claim in the bankruptcy proceeding of up to $120 million.
More recently, in December 2024, the United States intervened in a complaint against certain former executives of the lender who allegedly violated the FCA by submitting and causing the submission of false claims for loan forgiveness, loan guarantees, and processing fees to the Small Business Administration (SBA) in connection with lender’s participation in the PPP. When we discussed this case previously, we noted that we expected to see similar cases in the future brought against private lenders who failed to safeguard government funds. More broadly, we expect the trend of increasingly complex civil PPP fraud actions will continue in 2025.
Fraud Enforcement Involving Programs Administrated by the Health Resources and Services Administration (HRSA)
Provider Relief Fund (PRF) and Uninsured Program (UIP) fraud enforcement picked up in 2024. As described in the CFETF Report, the CFETF has leveraged an interagency network to make strategic improvements in how it investigates fraud. (Interagency collaboration is another theme from 2024, which we discuss more here.) The CFETF Report also describes a department-wide effort by the Department of Justice (DOJ) to roll out database tools to all US Attorney’s Offices to detect and investigate fraud. According to the CFETF Report, DOJ has analyzed more than 225 million claims paid by HRSA, the entity that dispensed PRF and UIP loans during the height of the pandemic. Closer investigatory scrutiny has led to increased enforcement actions.
PRF Fraud
Criminal PRF fraud enforcement resembled PPP enforcement from prior years, which was often based on theft or misappropriation theories. These enforcement actions often include charges against PRF recipients who either (i) retained funds to which they were not entitled or (ii) used PRF funds for ineligible expenses, like luxury goods. For example, in April 2024, a defendant who operated a primary care clinic pleaded guilty to theft and misappropriation of PRF funds. The defendant had certified that PRF funds would be used by the clinic only to prevent, prepare for, and respond to COVID-19. Despite making this representation, the clinic operator used the PRF funds for personal purposes, including cash withdrawals and the purchase of personal real estate, a luxury vehicle, a boat, and a trailer.
UIP Fraud
There were a number of noteworthy criminal UIP enforcement actions in 2024. In March 2024, a defendant was charged with filing fraudulent COVID-19 testing reimbursement, through the laboratory he managed, for COVID-19 testing that was never provided. The defendant allegedly obtained and used the personal identifying information of incarcerated or deceased individuals in connection with those claims. The indictment alleged that the defendant received $5.6 million in reimbursement and used those UIP funds to purchase property in South Florida.
Enforcement actions involving UIP funds involved significant alleged losses by the government. In February 2024, a defendant pleaded guilty to mail fraud and identity theft charges in what the government called “one of the largest COVID fraud schemes ever prosecuted.” The defendant and her co-conspirators filed more than 5,000 fraudulent COVID-19 unemployment insurance claims using stolen identities to unlawfully obtain more than $30 million in UIP fund benefits. To execute the scheme, the defendant and others created fake employers and employee lists using the personally identifiable information of identity theft victims. The defendant was sentenced to 12 years in prison, and seven co-conspirators have also pleaded guilty in connection with this large fraudulent scheme.
In one major civil FCA resolution, in June 2024, a group of affiliated urgent care providers agreed to pay $12 million to resolve allegations that they submitted or caused the submission of false claims for COVID-19 testing to the HRSA UIP. The government alleged that the providers knew their patients were insured at the time of testing (and in some instances had insurance cards on file for certain patients), yet they submitted claims (and caused laboratories to submit claims) to HRSA’s UIP for reimbursement. The resolution is noteworthy because the providers received a relatively low FCA damages multiplier as credit for cooperating with the government in its investigation under DOJ’s Guidelines for Taking Disclosure, Cooperation, and Remediation into Account in False Claims Act Matters. More information on DOJ’s efforts to encourage voluntary self-disclosure can be found in our related EnforceMintz article here.
Fraud Schemes Involving Respiratory Pathogen Panels
Fraud involving expensive respiratory pathogen panels (RPPs) has been in the spotlight since the beginning of the pandemic. In 2022, the Office of Inspector General for the Department of Health and Human Services (OIG) warned about laboratories with questionably high billing for tests submitted for reimbursement alongside COVID-19 tests, including RPPs. The OIG deemed this scenario as deserving of “further scrutiny.” Medicare reimbursed some outlier laboratories approximately $666 dollars for COVID-19 testing paired with other add-on tests while Medicare reimbursed approximately $89 for this same testing to the majority of laboratories. The trend in RPP fraud enforcement that we discussed last year continued in 2024: enforcement actions involved a mix of criminal and civil RPP fraud cases involving significant damages.
One laboratory owner was criminally charged with submitting $79 million in fraudulent claims to Medicare and Texas Medicaid for medically unnecessary RPP tests. The laboratory owner used the personal information of a physician — without the physician’s knowledge — to submit the claims even though the physician had no prior relationship with the test recipients, was not treating the recipients, and did not use the test results to treat the recipients. The government seized over $15 million in cash from this defendant.
In another case involving both criminal and civil charges, a Georgia-based laboratory and its owner agreed to pay $14.3 million to resolve claims that they paid independent contractor sales representatives volume-based commissions to recommend RPP testing to senior communities interested only in COVID-19 testing. The independent sales contractors used forged physician signatures and sham diagnosis codes to add RPP testing to requisition forms ordering only COVID-19 testing. The whistleblower in this case — the laboratory’s manager — is set to receive $2.86 million of the recovery.
As the government continues to deploy data analytics to identify outlier cases, we suspect enforcement actions involving COVID-19 companion testing will continue.
Future of COVID-19 Enforcement
Over four years from the enactment of the CARES Act, COVID-19 fraud enforcement continues to evolve. Since the beginning, the government has consistently pursued criminal cases involving misused or fraudulently obtained funds, fake COVID cures, and fake COVID testing. In 2022, the government extended the statute of limitations for PPP fraud from five to ten years, recognizing that more time was needed to investigate and prosecute fraud on these programs.
This past year, a broader range of pandemic fraud schemes were prosecuted criminally and civilly. These often data-heavy or analytics-based cases require a significant investment of time and resources. Recognizing the resources required for these more complicated matters, the CFETF called for increased funding and an extension of the statute of limitations for all pandemic-related fraud in the CFETF Report. As of the date of this publication, that request has not yet been answered. It thus appears the funding request will be determined by the new administration.
Despite uncertainty around future funding for COVID-19 fraud enforcement, we anticipate more criminal and high-dollar civil enforcement actions in 2025. The CFETF Report described 1,200 civil pandemic fraud matters pending as of April 1, 2024, for which DOJ had obtained more than 400 judgments or settlements totaling over $100 million. This leaves approximately 800 pending civil matters, and untold billions in fraudulently obtained funds still in the hands of fraudsters. Despite uncertainty around future fraud enforcement funding, as a general matter, fraud enforcement has bipartisan support. Either way, employees, related parties, and patient relators — with the support of sophisticated relator’s counsel — will likely continue to bring pandemic fraud cases in the coming years. Overall, COVID-19 fraud enforcement is unlikely to slow down in 2025.

EnforceMintz — Medicare Advantage and Part D Programs to Remain in the Enforcement Spotlight in 2025

As government scrutiny and enforcement targeting the Medicare Advantage (Medicare Part C) program continued in 2024, the industry’s response to agency actions escalated. Last year also resulted in the first sizable Part D False Claims Act settlement. Year over year, as the number of enrollees in Medicare Advantage plans and Part D plans has steadily increased, the total federal spending on Medicare Advantage and Part D has likewise risen and the spotlight on these programs and those who participate in them has intensified.
As seen in years past, the Department of Justice (DOJ) as well as the two agencies that regulate Medicare Advantage Organizations (MAOs) and Part D plan sponsors (PDP Sponsors), the Centers for Medicare & Medicaid Services (CMS), and the Office of Inspector General for the Department of Health and Human Services (OIG), focused much of their attention on risk adjustment activities. DOJ remained in active litigation against many of the largest MAOs in the country while CMS and the OIG began conducting risk adjustment audits subject to extrapolation. Throughout 2024, the industry challenged CMS’s regulatory actions relating to Star Ratings and rules for communicating with Medicare beneficiaries who are considering Medicare Advantage and Part D plans. Finally, On December 9, 2024, CMS also finalized its updated Overpayment Rule for MAOs and PDP Sponsors in the 2025 Physician Fee Schedule Rule.
With Medicare Advantage expected to remain a top enforcement priority in 2025 and Part D enforcement growing, we anticipate that DOJ and CMS will continue to target the actions not only MAOs and PDP Sponsors, but also vendors and third-party entities that touch the Part C and D programs. In 2025, we will also be closely watching for court decisions in ongoing litigation matters that will undoubtedly influence future theories of liability and test the strength of defenses raised by MAOs, PDP Sponsors, and their vendors.
Recent Settlements Demonstrate that DOJ’s Enforcement Interest Spans the Industry
In 2024, DOJ settled two notable False Claims Act (FCA) matters relating to Medicare Advantage, which demonstrate that DOJ’s enforcement interests are not limited to MAOs, but also include vendors and other third-party entities engaged in risk adjustment practices and more. Plus, DOJ settled a large Part D matter relating to how drug costs are reported to and impact Medicare Part D payments from CMS.
Last year, Principal Deputy Assistant Attorney General Brian M. Boynton underscored DOJ’s “commitment to holding accountable third parties that cause the submission of false claims” and the government’s intention to “expand its focus on the Medicare Part C Program to include an examination of the role that vendors and providers play in the diagnoses that are submitted to the government.” DOJ made good on this promise.
For example, DOJ targeted entities involved in marketing efforts to Medicare Advantage patients. In September, Oak Street Health (Oak Street) agreed to pay $60 million to resolve the government’s allegations that it paid kickbacks to third-party insurance agents in exchange for recruiting Medicare beneficiaries to Oak Street’s primary care clinics in violation of the FCA. More specifically, DOJ alleged that Oak Street violated the Anti-Kickback Statute when, in exchange for referring Medicare beneficiaries to Oak Street, Oak Street paid insurance agents (who were acting as agents for MAOs) $200 per beneficiary referred or recommended to Oak Street’s primary care clinics. DOJ further alleged that the insurance agents delivered targeted messages to eligible seniors designed to generate interest in Oak Street and that the payments received incentivized those agents to base their referrals and recommendations on the financial motivations of Oak Street rather than the best interests of seniors. The complaint was filed by a relator who partnered with insurance agents and was contacted by Oak Street, and DOJ intervened in September for purposes of settlement. Although this settlement was with a provider organization (as explained further in), the conduct focused on Medicare Advantage members and their interactions with agents and brokers. CMS similarly highlighted its concerns regarding misleading communications to Medicare beneficiaries in its updated Medicare Advantage and Part D communication rules discussed below.
DOJ also reached a settlement agreement with a risk adjustment coding vendor this December. DOJ kicked off the holiday season by announcing the long-awaited settlement with MAO Independent Health Association, its wholly owned subsidiary and risk adjustment vendor DxID, and DxID’s former CEO, totaling up to $100 million across the three defendants. The government alleged that DxID improperly coded diagnoses from member medical records to inflate Medicare’s payments to Independent Health, including by coding from improper sources, coding conditions for which patients were not treated, and sending addenda to providers months or years after the service occurred. The parties have seemingly been engaged in settlement discussions for years, jointly requesting continual extensions of time for defendants to answer DOJ’s complaint since 2023.
Under this settlement structured based on Independent Health’s ability to pay, Independent Health will make guaranteed payments of $34.5 million and contingent payments of up to $63.5 million on behalf of itself and DxID, which ceased operations in 2021. DxID’s CEO, Betsy Gaffney, will independently pay $2 million. While Independent Health did not admit fault under the settlement agreement, the MAO also entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG requiring that Independent Health hire an Independent Review Organization to annually review a sample of its Medicare Advantage beneficiary medical records and its internal controls to help ensure appropriate risk adjustment payments.
Additionally, following years of CMS voicing concerns over Part D Direct and Indirect Remuneration (DIR) and beneficiary protections, DOJ for the first time settled a significant matter relating to Part D DIR reporting. In July, DOJ entered into a settlement agreement with Elixir Insurance Company (Part D plan sponsor), Rite Aid Corporation (Parent Organization), and Elixir Rx Solutions (PBM) for a total of $121 million to resolve allegations that the defendants failed to appropriately report drug rebates through the Medicare Part D DIR reporting mechanism that is used by CMS to reconcile and calculate payments to Part D plan sponsors. Because Rite Aid Corporation, the parent organization, had declared bankruptcy, a portion of the settlement ($20 million) was granted as an allowed, unsubordinated, general unsecured claim in Rite Aid’s bankruptcy case in the District of New Jersey.
This is the first substantial Part D settlement focusing on Part D DIR, and it aligns with a theory of liability that DOJ has been considering for almost a decade. DOJ alleged that amounts that should have been reported as DIR (and therefore would have reduced the amount of revenue the government would pay a PDP Sponsor) were instead falsely reported as fees that do not qualify as DIR, and therefore the PDP Sponsor received and retained government payments to which it was not entitled.
Ongoing Litigation is Likely to Shape Risk Adjustment Enforcement in 2025 and Beyond
As previewed in last year’s report, DOJ continued to litigate three large FCA risk adjustment-focused cases last year against United Healthcare, Kaiser Foundation Health Plans and their affiliated medical groups, and Anthem. Because DOJ’s regulatory expectations of MAOs are often borne out through enforcement actions, judicial instruction on this topic is likely to shape future government actions and exemplify the standard of due diligence MAOs are expected to uphold when engaging in risk adjustment coding activities.
We summarized the current status and next steps for these three key cases below:

UnitedHealthcare. Litigation continued last year between the country’s largest MAO and DOJ in US ex rel. Poehling v. UnitedHealth Group, Inc. et al. (C.D. Cal.), reaching a key milestone this summer when the parties filed cross motions for summary judgment. In its Complaint in Intervention filed back in 2017, DOJ alleged that United failed to delete inaccurate diagnosis codes that it knew were unsupported by the medical records and thus resulted in overpayments. As one of the few Medicare Advantage lawsuits to reach this stage of litigation, we are watching closely for a summary judgment decision in the new year focused on the elements required to prove liability under the FCA’s reverse false claims provision.
Anthem. The government raised similar allegations against Anthem in United States v. Anthem, Inc. (S.D.N.Y), arguing that Anthem failed to identify and remove inaccurate diagnosis codes as part of its chart review program. DOJ and Anthem spent 2024 litigating discovery disputes and are set to remain in discovery through 2026.
Kaiser. DOJ also remained in active discovery with Kaiser in the lawsuit US ex rel. Osinek v. Kaiser Permanente (N.D. Cal.). The government’s Complaint in Intervention, filed in 2021, focuses on Kaiser’s use of addenda in medical records. DOJ alleges that Kaiser pressured physicians to create addenda often months after the patient encounter to retroactively add unsupported diagnoses, and that Kaiser used “data mining” programs to identify missed diagnoses and create the addenda. Following the denial of Kaiser’s motion to dismiss, the parties spent 2024 litigating discovery disputes before a magistrate judge. The case will remain in the discovery phase at least through 2025, with dispositive motions not scheduled until 2026, and a trial date currently set over two years out in 2027.

CMS and The OIG Take Active Role in Regulating Medicare Advantage and Part D with New Rules and the Impact of Extrapolation
Similar to DOJ’s expanded enforcement approach discussed above, both CMS and the OIG continued to focus on risk adjustment activities while CMS also began more heavily regulating agents and brokers who communicate with Medicare beneficiaries.
Risk Adjustment, RADV Audits, and Overpayment Rule: As it relates to risk adjustment, the OIG issued a second report concerning MAOs’ alleged use of in-home health risk assessments (IH-HRAs) to drive up payments. IH-HRAs are exams conducted by health care providers (typically nurse practitioners) in a member’s home to collect information regarding that patient’s health. In its report, the OIG identified 20 MAOs that it believes are outliers for their use of IH-HRAs as a tool to report diagnoses of their members to CMS. The OIG published a similar report in 2021 concluding that IH-HRAs and chart reviews are vulnerable to misuse by MAOs, which has likely driven DOJ enforcement action targeting these practices since.
CMS and the OIG regularly conduct audits of the diagnosis codes that MAOs submitted for their members. Critically, in 2024, the OIG finalized and CMS initiated risk adjustment audits that reached Payment Year (PY) 2018, which is the first year that extrapolation under the CMS final rule applies. Under this rule (42 C.F.R. 422.310(e)) which was finalized in February 2023, CMS has the authority to extrapolate risk adjustment audit findings covering diagnosis codes MAOs submitted in PY 2018 and forward. For years prior to PY 2018, MAOs have only had to repay overpayments identified in the actual sample that CMS or the OIG reviewed.
Last year CMS selected the MAOs that will be subject to PY 2018 Risk Adjustment Data Validation (RADV) Audits and has initiated that process with the selected MAOs. The OIG has already completed certain audits that include PY 2018 and the monetary impact of extrapolation of the findings is immediately apparent. For example, Humana’s final report for diagnosis-targeted audits imposed an overpayment obligation of just $274,000 for diagnoses audited from PY 2017 (no extrapolation) as compared to over $6.5 million in estimated overpayments for diagnosis codes audited from PY 2018 (with extrapolation). Similarly, Health Assurance of Pennsylvania’s final report auditing diagnosis codes in PYs 2018 and 2019 with extrapolation totaled $4.2 million in overpayments.
Additionally, in early December, CMS finalized the Overpayment Rule that requires MAOs and Part D plan sponsors to report and return overpayments within 60 days of an identification. The Rule was initially adopted in 2014 and held MAOs and Part D plan sponsors to a “reasonable diligence” standard when determining when an overpayment had been “identified.” The “reasonable diligence” standard was struck down in United Healthcare Insurance Company v. Azar when the district court held that the standard was impermissibly being used to establish False Claims Act liability. The updated Overpayment Rule, proposed in December 2022, has now replaced the “reasonable diligence” standard with the knowledge standard from the False Claims Act. An MAO is now considered to have “identified” an overpayment when it knowingly (either with actual knowledge, or through reckless disregard or deliberate ignorance) receives or retains an overpayment.
Medicare Advantage and Part D Communication Rules: CMS adopted changes to the Medicare Advantage and Part D Communication regulations for 2025 that, according to CMS, seek to increase transparency and protect Medicare beneficiaries from receiving misleading information about coverage options. CMS expressed concern that agents and brokers who were contracted with MAOs and Part D plan sponsors were enrolling beneficiaries into plans based on which plans paid the agents and brokers the most money, rather than the plan that was in each beneficiary’s best interests.
To address this concern, the revised regulations: (1) prohibit MAOs and Part D plan sponsors from having contract provisions that could directly or indirectly create an incentive that would reasonably be expected to inhibit an agent or broker’s ability to objectively assess and recommend which plan best fits the health care needs of the beneficiary, (2) recognize that MAOs and Part D plan sponsors may pay agents and brokers and Third-Party Marketing Organizations (TPMOs) for certain administrative and overhead expenses but limit the payment for such services to $100 per member enrolled by the agent, broker, or TPMO, previously there was no express limit other than that the values of such payments must not exceed those within the market), and (3) adopt more stringent consent requirements needed in order for a beneficiary’s information to be shared by a TPMO with a third party, including related third parties. As described further below, many entities that provide agent and broker services, referred to as field marketing organizations, or FMOs, sued CMS over these rule changes.
Following these regulatory changes and DOJ actions against brokers and agents, the OIG also weighed in when in December it issued a Special Fraud Alert warning the industry regarding its perceived risks of marketing arrangements between MAOs and health care providers or between providers and agents and brokers for MAOs. We discuss this alert further in our article here.
Industry Actions are on the Rise following the Demise of Chevron Deference
As has been widely reported, the US Supreme Court issued in June a landmark decision in Loper Bright Enterprises v. Raimondo, which struck down the longstanding doctrine of so-called “Chevron deference” to federal agency interpretation of ambiguous statutes and substantially expanded judicial review of such statutes. As expected, Loper Bright has already led to increased scrutiny of, and challenges to, agency action, including in the Medicare space. While “enforcement” against agencies is not typical government “enforcement,” it affects government enforcement matters because it impacts how agencies can take enforcement actions and what rules are enforceable.
In May 2024, certain FMOs sued CMS in the United States District Court for the Northern District of Texas, seeking to invalidate certain portions of the 2025 Medicare Advantage and Part D Communications regulations. The FMOs argued that the provision of these rules, summarized above in the Medicare Advantage and Part D Communication Rules section, violated the Administrative Procedure Act (APA). They argued that the rule was arbitrary and capricious under the APA, claiming that CMS finalized the rule based on “pure speculation,” ignored objections from the public, and failed to acknowledge reliance interests of brokers. The FMOs further contended that the rule failed to properly adhere to the notice and comment procedural requirements because CMS relied upon evidence not presented during notice and comment rulemaking. Less than a week after the Loper Bright decision, the court granted the FMOs’ request for a preliminary injunction relating to the regulation that restricted contract terms and limited administrative fee payments, finding that the rules were not reasonable.
Also, last fall four of the largest MAOs, UnitedHealthcare, Centene, Elevance, and Humana, all challenged how CMS calculated their specific Star Ratings, and, more recently, at least two Blues plans have also sued CMS. Star Ratings is the system that CMS uses to rate the performance of MAO and PDP plan sponsors. A plan’s Star Rating impacts how and when it can be marketed, and in Medicare Advantage, impacts how the plan is paid and when CMS can terminate a plan’s contract. United and Centene’s cases were relatively similar, focusing on how CMS evaluated and calculated a certain call center measure. Humana and Elevance each had arguments specific to their circumstances, and also included broader complaints regarding how CMS calculates Stars. Humana specifically challenged CMS’s unwillingness to share industry data with MAOs to ensure appropriate calculations. On November 22, 2024, the Eastern District of Texas granted summary judgment for UnitedHealthcare and ordered CMS to recalculate the MAO’s Star Rating by removing the one call center measure in dispute. In early December, Centene reported that CMS recalculated its Star Rating for 2025 following its challenge. The other cases are ongoing.
The challenges to Star Ratings are an important enforcement development because these lawsuits may force CMS to rethink how it operates the Star Ratings program and may impact whether CMS can terminate contracts that CMS believes are low performing.
Conclusion
Following another year of intense scrutiny, the Medicare Advantage industry is set to remain a government enforcement priority in 2025, and PDP plan sponsors will likely attract similar scrutiny. Both MAOs as well as third-party entities involved in the Part C program should continue to monitor DOJ enforcement activity and decisions in ongoing litigation to evaluate their risk adjustment practices. Moreover, with the danger of extrapolation of risk adjustment audits evident, MAOs must be mindful to engage in robust compliance efforts and to review published OIG reports and related guidance to mitigate enforcement risk. PDP Sponsors and their vendors should expect increased scrutiny following the Elixir settlement, the continued rollout of the Inflation Reduction Act and the intense national discussion regarding prescription drug costs. We will continue to monitor the evolving enforcement actions against MAOs and PDP Sponsors and watch closely for updated guidance whether via agency regulations and reports or court decisions in 2025 and beyond.

ETA Travel Requirement for Visitors to The United Kingdom

Most individuals who are visiting the UK or transiting through the UK, and who are exempt from obtaining a visitor visa, will now need to obtain an Electronic Travel Authorization (ETA) prior to travel. The ETA requirement takes effect for US citizens (as well as citizens for nearly 50 other countries) for travel to the UK on January 8, 2025 or later. The ETA is also required for those who are transiting through the UK.
The cost to apply for an ETA is UK £10. The UK Home Office states that processing will be completed within three business days, and possibly sooner. An approved ETA is valid for a period of two years, or until the applicant’s passport expires, and can be renewed.
The link to electronic registration is here. Travelers can also utilize the UK ETA app on their smartphones.
Additional information about the ETA scheme can be found here:

UK Home Office ETA scheme factsheet: ETA Factsheet
Guidance from our friends at Kingsley Napley: Kingsley Napley ETA guidance

DOL: Employers Cannot Mandate PTO Use with State/Local Paid Leave Benefits During FMLA

The U.S. Department of Labor Wage and Hour Division (“WHD”) has issiued an opinion letter stating that employers cannot require employees to substtute accrued paid time off during a Family and Medical Leave Act (“FMLA”) leave where the employee is also receiving benefits under a state or local paid family or medical leave program.
The opinion letter – which does not have the force of law but sets forth the agency’s enforcement position – answers a longstanding open question around the interplay between the FMLA, state/local paid leave programs, and accrued paid time off.
A Quick Refresher: FMLA and State Family/Medical Leave Programs
The federal FMLA entitles eligible employees of covered employers to up to 12 weeks (or in limited cases, 26 weeks) of unpaid, job-protected leave per 12-month period for specified family and medical reasons. Covered reasons for FMLA leave include an employee’s own serious health condition, caring for a parent, spouse or child with a serious health condition, and caring for a new child following birth, adoption or foster placement.
Since the FMLA’s enactment in 1993, numerous states (including New York, California, Massachusetts, Connecticut, and others) have instituted family and/or medical leave programs that provide partially paid leave (usually based on a percentage of the employee’s wages, up to a set cap) for personal medical, family care and/or parental leave reasons. Likewise, certain local governments have implemented paid family and medical leave programs specifically for their municipal employees. Many of these programs permit leave for reasons that are also qualifying reasons for leave under the FMLA. However, state/local paid leave programs often include benefits that differ from or exceed what the FMLA provides, such as longer leave periods or additional covered reasons for leave.
What Do the FMLA Regulations Say About Substitution of PTO?
While FMLA leave is unpaid, the governing regulations allow an employee to elect, or an employer to require the employee, to “substitute” accrued employer-provided paid time off (e.g., paid vacation, paid sick leave, etc.) for any part of an unpaid FMLA period – that is, the accrued paid time off may be used concurrently with FMLA leave to enable the employee to receive full pay during an otherwise unpaid leave period. However, the regulations further state that, during any part of an FMLA leave where an employee is receiving disability or workers’ compensation benefits, neither the employer nor the employee can require substitution of paid time off because such leave is not unpaid. Rather, when disability or workers’ compensation benefits are being received, the employer and the employee may only mutually agree (where state law permits) that accrued paid time off will be used to supplement such benefits.
EXAMPLE: John tells his employer he requires 12 weeks of leave to recover from a serious back surgery. John’s employer designates the 12 weeks as FMLA leave. John also applies and is approved for 12 weeks of disability benefits under his employer’s short-term disability program, pursuant to which he will receive a benefit equal to two-thirds of his regular wages. John’s employer cannot require John to substitute his accrued vacation time because he is receiving disability benefits and therefore his FMLA is not unpaid. However, John and his employer agree to use one-third of his available vacation time each week to supplement his disability pay so John receives 100% pay during the leave.
How Does the Opinion Letter Impact Substitution of PTO During FMLA?
Because they have only more recently come into existence, state and local paid family or medical leave programs are not directly addressed in the FMLA regulations. However, the opinion letter now makes clear that “the same principles apply to such programs as apply to disability plans and workers compensation programs.”
First, the opinion letter emphasizes that “where an employee takes leave under a state or local paid family or medical leave program, if the leave is covered by the FMLA, it must be designated as FMLA leave[.]” The opinion letter then goes on to state:
[W]here an employee, during leave covered by the FMLA, receives compensation from a state or local family or medical leave program, the FMLA substitution provision does not apply to the portion of leave that is compensated. Because the substitution provision does not apply, neither the employee nor the employer may use the FMLA substitution provision to unilaterally require the concurrent use of employer-provided paid leave during the portion of the leave that is compensated by the state or local program. [However], if the employee is receiving compensation through state or local paid family or medical leave that does not fully compensate the employee for their FMLA covered leave, and the employee also has available employer-provided paid leave, the employer and the employee may agree, where state law permits, to use the employee’s employer-provided accrued paid leave to supplement the payments under a state or local leave program.

The opinion letter also notes that if an employee’s leave under a state or local paid family or medical leave program ends before the employee has exhausted their full FMLA leave entitlement and the leave therefore becomes unpaid, the FMLA substitution provision would then apply and the employee would be able to elect, or the employer would be able to require the employee, to substitute accrued paid time off.
EXAMPLE: Jane tells her employer she requires 12 weeks of leave to care for her husband while he recovers from a serious back surgery. Jane’s employer designates the 12 weeks as FMLA leave. Jane also applies and is approved for 8 weeks of paid family care benefits under her state’s paid family and medical leave program, pursuant to which she will receive a benefit equal to two-thirds of her regular wages. Jane’s employer cannot require Jane to substitute her accrued vacation time during the 8 weeks of her FMLA leave where she is concurrently receiving state family care benefits because her FMLA during that time is not unpaid. However, Jane and her employer agree to use one-third of her available vacation time each week during the first 8 weeks to supplement her state family care benefit so Jane receives 100% pay during that time. Beginning on week 9, Jane is no longer eligible for state family care benefits and her FMLA leave is now unpaid, so pursuant to its FMLA policy Jane’s employer requires her to substitute her remaining accrued vacation time during the FMLA leave until it is exhausted.
Implications and Action Steps for Employers
The opinion letter clarifies what has been a gray area around the interplay between the FMLA, state/local paid leave programs, and accrued paid time off. For example, the regulations governing the New York Paid Family Leave Law (“NYPFL”) state that “[a]n employer covered by the FMLA . . . that designates a concurrent period of family leave under [the NYPFL] may charge an employee’s accrued paid time off in accordance with the provisions of the FMLA.” However, it had previously been unclear whether this language in fact permitted employers to require substitution of accrued paid time off during a concurrent FMLA and NYPFL leave. It is now clear that such a requirement is impermissible, though employers and employees may agree to use paid time off to supplement NYPFL benefits.
Employers should now review their leave policies and practices to ensure that any provisions around the use of accrued paid time off during FMLA leave comport with the WHD’s interpretation of the requirements of the law. To the extent that any such policies require employees to substitute accrued paid time off during an FMLA leave where an employee is concurrently receiving disability, workers’ compensation or state/local paid family or medical leave benefits, the policies should be revised to provide that paid time off may only be used to supplement such other payments and only if both the employer and the employee agree.
However, employers are reminded that, as noted above, there may be situations where employees are eligible for benefits under state/local paid leave laws that are not also covered by the FMLA. As such, employers should also take note of what an applicable state/local paid family or medical leave law may permit (or not permit) around the substitution of paid time off and apply those rules during any leave period that does not run concurrently with the FMLA.

New Extended Producer Responsibility Requirements for Companies Selling Tobacco and Nicotine Products in Single-Use Packaging

A wave of new “Extended Producer Responsibility” or “EPR” programs is beginning to impact companies placing packaged products, including tobacco products, on the market in U.S. states, including California, Colorado, Maine, Minnesota, and Oregon.
The five EPR programs for packaging enacted thus far have different facets. However, at their core, each of the EPR programs requires companies that sell packaged products (with some limited exceptions) to join a newly formed, state-recognized organization (typically called a “Producer Responsibility Organization” or “PRO”) and pay annual dues based on the amount and type of packaging placed on the market in that state. California’s PRO, for one, must collect $500,000,000 annually from producers of covered products, like single-use packaging. Producers also will need to eventually meet certain sustainability goals for single-use packaging, such as ensuring compostability or recyclability of packaging or meeting minimum post-consumer recycled content targets. What is more, the EPR programs encompass not just primary packaging that directly contacts a good, but often shipping and display packaging as well.
As noted above, the EPR program obligations typically fall on the “producer” of the covered product. In the case of single-use packaging, the states have generally defined producer to mean the brand owner that places a packaged good on the market. For example, an e-cigarette or nicotine pouch company that sells or distributes its branded (tobacco-flavored) e-cigarette or pouch in California would be considered the “producer” of any single-use packaging associated with the finished product, even if the e-cigarette or pouch company did not manufacture the packaging itself. Accordingly, it is the companies marketing the finished products, not packaging companies, that will need to register as producers of tobacco product packaging in the states with packaging EPR programs.
Certain state EPR programs – including Colorado’s and Minnesota’s – also include “paper products” as a covered product. While tobacco companies making roll-your-own (RYO) papers and other such paper-based products may be able to avail themselves of certain exemptions, they must assess this on a case-by-case basis.
In this regard, the state EPR programs include various exemptions for producers and covered products, such as exemptions for small-volume producers and exemptions for certain types of packaging, like infant formula packaging. However, the existing EPR laws do not include any explicit exemptions for tobacco product packaging or paper used in tobacco products. Accordingly, absent another applicable exemption, tobacco product manufacturers are likely to meet the producer definition under the state EPR laws, and thus will need to register with applicable state PROs, pay dues based on the product packaging sold in the state, and eventually meet certain goals for the packaging.
In complying with the state EPR schemes, the tobacco and nicotine product industries can expect to face not only supply chain challenges (e.g., the availability of post-consumer recycled content), but also possibly significant regulatory hurdles under the Family Smoking Prevention and Tobacco Control Act. Under the EPR programs, producers may need to make changes to product packaging to meet sustainability targets. Changes to the container-closure system for a legally marketed tobacco product may well require a new premarket authorization from the U.S. Food and Drug Administration (FDA), which can be a costly and timely endeavor.
In terms of implementation timelines, the states will be rolling out their EPR requirements on differing schedules. The deadline for producers to register with Colorado’s PRO occurred on October 1, 2024, while in California, a deadline to register with the PRO has not been established, but the state has proposed a rule that would require producers to register with CalRecycle later this year. Eventually, producers of covered products will be prohibited from selling in states with EPR programs unless they are registered and participating in the programs.
EPR programs for packaging are likely to spread. Numerous other states have considered or are now considering EPR bills, including New York and New Jersey.

Biden Administration Releases Executive Order Advancing Artificial Intelligence

Highlights
The Biden administration’s latest executive order represents a transformative step in the U.S.’ approach to AI, integrating innovation with sustainability and security
Businesses will have an opportunity to align with this strategic vision, contribute to an ecosystem that will sustain U.S. leadership, and encourage economic competitiveness
The principles outlined in the executive order will guide federal agencies to ensure AI infrastructure supports national priorities while fostering innovation, sustainability, and inclusivity

On Jan. 14, 2025, President Biden issued an executive order on advancing the United States’ position as a leader in the creation of artificial intelligence (AI) infrastructure.
AI is a transformative technology with critical implications for national security and economic competitiveness. Recent advancements highlight AI’s growing role in industries and areas including logistics, military capabilities, intelligence analysis, and cybersecurity. Developing AI domestically could be essential in preventing adversaries from exploiting powerful systems, maintaining national security, and avoiding reliance on foreign infrastructure.
The executive order posits that to secure U.S. leadership in AI development, significant private sector investments are needed to build advanced computing clusters, expand energy infrastructure, and establish secure supply chains for critical components. AI’s increasing computational and energy demands necessitate innovative solutions, including advancements in clean energy technologies such as geothermal, solar, wind, and nuclear power.
The executive order notes:
National Security and Leadership

AI infrastructure development should enhance U.S. national security and leadership in AI, including collaboration between the federal government and the private sector; ensuring safeguards for cybersecurity, supply chains, and physical security; and managing risks from future frontier AI capabilities.
The Secretary of State, in coordination with key federal officials and agencies, will create a plan to engage allies and partners in accelerating the global development of trusted AI infrastructure. The plan will focus on advancing collaboration on building trusted AI infrastructure worldwide.

Economic Competitiveness

AI infrastructure should also strengthen U.S. economic competitiveness by fostering a fair, open, and innovative technology ecosystem by supporting small developers, securing reliable supply chains, and ensuring that AI benefits all Americans.

Clean Energy Leadership

The U.S. aims to lead in operating AI data centers powered by clean energy to help ensure that new data center electricity demands do not take clean power away from other end users or increase grid emissions. This involves modernizing energy infrastructure, streamlining permitting processes, and advancing clean energy technologies, ensuring AI infrastructure development aligns with new clean electricity generation.
The Department of Energy, in coordination with other agencies, will expand research and development efforts to improve AI data center efficiency, focusing on building systems, energy use, cooling infrastructure, software, and wastewater heat reuse. A report will be submitted to the president with recommendations for advancing industry-wide efficiency, including innovations like server consolidation, hardware optimization, and power management.
The Secretary of Energy will provide technical assistance to state public utility commissions on rate structures, such as clean transition tariffs, to enable AI infrastructure to use clean energy without raising electricity or water costs unnecessarily.

Cost and Community Considerations

Because building AI in the U.S. requires enormous private-sector investments, the AI infrastructure must be developed without increasing energy costs for consumers and businesses. Companies participating in AI development, clean energy technology, and grid and semiconductor development can work with federal agencies to strategically further these initiatives that align with broader ethical and operational standards.
The Secretaries of Defense and Energy will each identify at least three federally managed sites suitable for leasing to non-federal entities for the construction and operation of frontier AI data centers and clean energy facilities. These sites should aim to be fully permitted for construction by the end of 2025 and operational by the end of 2027.
Priority will be given to locations that 1) have appropriate terrain, land gradients, and soil conditions for AI data centers; 2) minimize adverse impacts on local communities, natural or cultural resources, and protected species; and 3) are near communities seeking to host AI infrastructure, supporting local employment opportunities in design, construction, and operations.

Worker and Community Benefits

AI infrastructure projects should uphold high labor standards, involve close collaboration with affected communities, and prioritize safety and equity, ensuring the broader population benefits from technological innovation.
The Director of the Office of Management and Budget, in consultation with the Council on Environmental Quality, will evaluate best practices for public participation in siting and energy-related infrastructure decisions for AI data centers. Recommendations will be made to the Secretaries of Defense and Energy, who will incorporate these into their decision-making processes to ensure effective governmental engagement and meaningful community input on health, safety, and environmental impacts.
Relevant agencies will prioritize measures to keep electricity costs low for households, consumers, and businesses when implementing AI infrastructure on Federal sites.

Takeaways
The U.S. is committed to enabling the development and operation of AI infrastructure, including data centers, guided by five key principles: 1) national security and leadership; 2) economic competitiveness; 3) leadership in clean energy; 4) cost and community consideration; and 5) workforce and community benefits.
The Biden administration’s latest initiative aims to foster a competitive technology ecosystem, enable small and large companies to thrive, keep electricity costs low for consumers, and ensure that AI infrastructure development benefits workers and their local communities.

Private Market Talks: Bringing Private Credit to the Wealth Channel with Nomura Capital Management’s Robert Stark [Podcast]

In our first episode of 2025, we’re excited to speak with Robert Stark, CEO of Nomura Capital Management. During our discussion, we discuss the competitive DCA ranges and challenges of building a private credit platform within a large, global financial institution. Robert also talks about how Nomura has been able to tap into its vast network of registered investment advisors to unlock distribution through the private wealth channel. Finally, we look forward and get Robert’s outlook for 2025. It’s a great start to the New Year!

New Antidumping and Countervailing Duty Petitions on Temporary Steel Fencing from China

On January 14, 2025, ZND US Inc (Petitioner or ZND), domestic producer of temporary steel fencing, filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) and countervailing duties (CVD) on temporary steel fencing from China. Such structures include fencing for construction sites, security perimeters, events, and animal kennels. The scope does not include permanent steel fencing.
Under U.S. law, a domestic industry may petition the United States government to initiate an AD investigation into the pricing of an imported product to determine whether it is sold in the United States at less than fair normal value prices. For market economies (which China is not), normal value is home market or third-country price, or actual cost plus reasonable profit of the foreign producer/exporter. For deemed non-market economy China, normal value is a constructed cost plus deemed reasonable profit based on surrogate values in a market economy deemed of comparable level of economic development to China.
A domestic industry also may petition for the initiation of an investigation of alleged countervailable subsidies provided by a foreign government to producers and exporters of the subject merchandise. DOC will impose AD and/or CVD duties on subject merchandise if it determines that imports of that product are dumped and/or subsidized, and if the ITC also determines that the domestic industry is materially injured or threatened with such injury by reason of imports of the subject merchandise.
The immediate activity will occur at the ITC. In the preliminary stage, the threshold to find injury from the accused imports is low such that the ITC generally finds sufficient indicia of injury to a U.S. industry from the accused imports to continue the AD/CVD investigations. If the ITC votes to continue, then the investigation moves to DOC.
If the ITC and DOC make preliminary affirmative determinations, U.S. importers will be required to post cash deposits in the amount of the AD and/or CVD duties for all entries of the subject merchandise entered on or after the date of DOC’s preliminary determinations being published in the Federal Register. Note that if there is a surge of imports from the subject countries following the filing of the petitions, DOC can find critical circumstances for a particular subject country (or producer) and instruct U.S. Customs & Border Protection (CBP) to collect cash deposits retroactively to 90 days before the date of publication of the preliminary determination.
Following further factual investigation, verification, and briefing, DOC can change the preliminary AD/CVD rates in its final determinations. AD/CVD Orders will only issue if both the DOC and ITC make affirmative final determinations. The ITC final injury investigation is more rigorous than its preliminary injury investigation, where historically 30% or so of petitions are rejected at that stage.
Scope
Petitioner requests the following product scope for the investigation:
“The merchandise subject to this investigation is temporary steel fencing. Temporary steel fencing consists of temporary steel fence panels and temporary steel fence stands. Temporary steel fence panels, when assembled with temporary steel fence stands or other types of stands outside of the scope, with each other, or with posts, create a free-standing structure. Such structures may include, but are not limited to, fencing for construction sites, security perimeters, and events, as well as animal kennels. Temporary steel fence panels are covered by the scope regardless of whether they attach to a stand or the type of stand to which they connect.
Temporary steel fence panels have a welded frame of steel tubing and an interior consisting of chain link, steel wire mesh, or other steel materials that are not more than ten millimeters in actual diameter or width. The steel tubing may surround all edges of the temporary steel fence panel or only be attached along two parallel sides of the panel. All temporary steel fence panels with at least two framed sides are covered by the scope, regardless of the number of edges framed with steel tubing.
Temporary steel fence panels are typically between 10 and 12 feet long and six to eight feet high, though all temporary steel fence panels are covered by the scope regardless of dimension. Temporary steel fence panels may be square, rectangular, or have rounded edges, and may or may not have gates, doors, wheels, or barbed wire or other features, though all temporary steel fence panels are covered by the scope regardless of shape and other features. Temporary steel fence panels may have one or more horizontal, vertical, or diagonal reinforcement tubes made of steel welded to the inside frame, though all temporary steel fence panels are covered by the scope regardless of the existence, number, or type of reinforcement tubes attached to the panel. Temporary steel fence panels may have extensions, pins, tubes, or holes at the bottom of the panel, but all temporary steel fence panels are covered regardless of the existence of such features.
Steel fence stands are shapes made of steel that stand flat on the ground and have one or two open tubes or solid pins into which temporary steel fence panels are inserted to stand erect. The steel fence stand may be made of welded steel tubing or may be a flat steel plate with one or two tubes or pins welded onto the plate for connecting the panels.
Temporary steel fencing is covered by the scope regardless of coating, painting, or other finish. Both temporary steel fence panels and temporary steel fence stands are covered by the scope, whether imported assembled or unassembled, and whether imported together or separately.
Subject merchandise includes material matching the above description that has been finished, assembled, or packaged in a third country, including by coating, painting, assembling, attaching to, or packaging with another product, or any other finishing, assembly, or packaging operation that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the temporary steel fencing.
Temporary steel fencing is included in the scope of this investigation whether or not imported attached to, or in conjunction with, other parts and accessories such as hooks, rings, brackets, couplers, clips, connectors, handles, brackets, or latches. If temporary steel fencing is imported attached to, or in conjunction with, such non-subject merchandise, only the temporary steel fencing is included in the scope.
Merchandise covered by this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under the subheading 7308.90.9590. The HTSUS subheading set forth above is provided for convenience and U.S. Customs purposes only. The written description of the scope is dispositive.”
Foreign Producers and Exporters of Subject Merchandise
A list of foreign producers and exporters of temporary steel fencing, as identified in the petition, is provided in Attachment 1.
U.S. Importers of Subject Merchandise
A list of U.S. importers of temporary steel fencing, as identified in the petition, is provided in Attachment 2.
Alleged Margins of Dumping/Subsidization
Petitioners allege the following dumping import duty margins:
China: 405.19%
These are only estimates based on data most favorable to Petitioner. DOC generally assigns duties at the highest alleged dumping rate to foreign producers and exporters who fail to cooperate during the investigation as to answering DOC questionnaires to obtain an AD/CVD margin based on their actual situation.
Petitioner does not provide specific subsidy rates in the petition.
Potential Trade Impact
According to official U.S. import statistics, imports of the subject merchandise totaled 38,423 short tons in 2024, representing approximately 85% of all imports of temporary steel fencing into the United States.
Estimated Schedule of Investigations

1/14/2025
Petition filed

2/28/2025
ITC preliminary injury determination

4/9/2025
DOC preliminary CVD determination, if not postponed

6/13/2025
DOC preliminary CVD determination, if fully postponed

6/23/2025
DOC preliminary AD determination, if not postponed

7/12/2025
DOC preliminary AD determination, if fully postponed

12/26/2025
DOC final AD and CVD determinations, if both preliminary and final determinations fully postponed

2/9/2026
ITC final injury determination, if DOC’s determinations fully postponed

2/16/2026
AD/CVD orders published