DHS Sending Termination Notices to CHNV Foreign Nationals
On June 12, 2025, the Department of Homeland Security (DHS) began sending termination notices to foreign nationals paroled into the United States under a parole program for Cubans, Haitians, Nicaraguans and Venezuelans (CHNV).
The terminations are legally allowed under a May 30, 2025, decision by the US Supreme Court lifting a federal district court injunction that had temporarily barred the federal government from implementing the revocations.
The termination notices inform the foreign nationals that both their parole is terminated, and their parole-based employment authorization is revoked – effective immediately.
Employer Obligations
The Immigration law provides that it is unlawful to continue to employ a foreign national in the U.S. knowing the foreign national is (or has become) an unauthorized alien with respect to such employment.
How will an employer know if an employee has lost work authorization?
For E-Verify users, E-Verify is in the process of notifying employers and employer agents that they need to log in to E-Verify and review the Case Alerts on the revocation of Employment Authorization Documents (EADs). The employer is then on notice that an employee has lost work authorization.
However, many employers are not enrolled in E-Verify. Those employers may learn of a revocation when an employee presents the termination notice to the employer. Also, as the CHNV revocation is in the news, DHS may consider employers on notice, with an obligation to review the status of its employees to determine whether workers have lost authorization to work.
At this point, DHS has not provided guidance to employers on their obligations, but we recommend employers act cautiously and take reasonable steps to determine whether company employees are impacted. We encourage taking these steps:
Employers should review their I-9 records and supporting documents to determine if employees have employment authorization cards with the code C11, and that the country of citizenship on the card lists Cuba, Haiti, Nicaragua or Venezuela.
When an employer is notified or discovers that an employee’s C11 work authorization has been revoked, the employer should not immediately terminate the employee. Certain individuals, even from the impacted countries, may have C11 work authorization separate and apart from the CHNV program. These work authorizations remain valid.
When an employer is reasonably certain the employee’s C11 employment authorization has been terminated, the employer should ask the employee if they have other valid work authorization (which is common). If yes, the employer should then reverify the employee’s Form I-9 in Supplement B, with the employee presenting new employment authorization documentation.
If an employee is unable to provide new employment authorization documentation, the employer should consider terminating employment. In the event of an Immigration & Customs Enforcement investigation, knowingly to continue to employ a foreign national who is not authorized to work in the U.S. can result in a potential charge.
When an employer is uncertain regarding the correct course of action, we recommend speaking to Immigration counsel to review and determine the appropriate steps.
Too Hot to Handle: Don’t Get Burned by Cal/OSHA’s Heat Rules
As summer temperatures rise across California, it’s a good time for employers to review their responsibilities under Cal/OSHA’s heat illness prevention standards. These rules apply to both outdoor and indoor workplaces and are designed to protect employees from heat-related illnesses and injury.
The outdoor heat illness prevention standards apply to all outdoor places of employment. For outdoor workplaces, employers must provide fresh drinking water, access to shade, and allow cool-down rest breaks when temperatures exceed 80°F, acclimatization procedures, and emergency response procedures. Additionally, high-heat procedures are required for specific industries including agriculture, construction, landscaping, oil and gas extraction, and transportation of certain products and materials. When the temperature reaches or exceeds 95°F, additional steps are required, such as closer monitoring and more frequent communication with employees. Training is also required for all outdoor employees and supervisors so that they can recognize the signs of heat illness and know how to respond.
Indoor workplaces are also covered under a newer regulation that took effect in 2024. If the temperature inside reaches 82°F or more, employers need to provide water, cool-down areas, acclimatization procedures, emergency response procedures, and supervisor and employee training. These regulations do not apply to incidental heat exposures where an employee is exposed to temperatures between 82-95°F for less than 15 minutes in any 60-minute period, with some exceptions. If the temperature or heat index hits 87°F, or if employees wear clothing that traps heat or work near a high radiant heat area and the temperature reaches or exceeds 82°F, monitoring and additional controls are required.
Finally, under both the outdoor and indoor standards, employers are required to establish a written Heat Illness Prevention Plan. This plan must contain the procedures implemented by the employer for the provision of water, shade, or cool-down areas, emergency response procedures, acclimatization procedures, and procedures for responding to high-heat work environments.
If a business includes both indoor and outdoor work, it’s important to evaluate each area separately and make sure the right protections are in place for each environment.
Texas Establishes Strategic Bitcoin Reserve
On June 20, 2025, Texas Governor Greg Abbott signed into law SB 21, an act establishing a Texas Strategic Bitcoin Reserve. The act is immediately in effect.
In adopting the new legislation, the Texas legislature found that bitcoin and other cryptocurrencies are assets with strategic potential for enhancing the state’s financial resilience. Bitcoin and other cryptocurrencies can serve as a hedge against inflation and economic volatility. Establishment of a strategic bitcoin reserve serves the public purpose of providing enhanced financial security to Texas residents. The Texas Strategic Bitcoin Reserve will exist outside the state treasury under the custody of the Comptroller of Public Accounts.
The Comptroller is authorized to manage the Reserve, which will include bitcoin or any other cryptocurrency with an average market capitalization of at least $500 billion over the most recent 24-month period. The Reserve will be funded through legislative appropriations, open market purchases, forks, or airdrops to the state’s cryptocurrency addresses. The statute also establishes a five-person advisory committee to advise the Comptroller regarding administration and management of the Reserve. The Comptroller must publish a biennial report regarding the value of the fund and actions taken by the Comptroller to administer and manage the Reserve during the preceding state fiscal biennium.
IYKYK: How a Few Words in the Next Farm Bill May Change the Future of Alcohol and Cannabis
These are remarkable times in what has been a remarkable, albeit relative to other industries, remarkably short life cycle for the cannabis industry.
In such times, I am reminded of Rudyard Kipling’s words about how to face trying times:
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise
Make no mistake about it: Many are losing their heads about cannabis and blaming the cannabis industry. Many are doubting the cannabis industry and hating it. Can the cannabis industry keep its head, trust itself, wait, and not give way to hating during the most consequential debate about cannabis that has ever occurred in Congress?
So, what are the implications for the cannabis – and tangentially but directly the alcohol – worlds moving forward? Let’s dive in.
What Is the Farm Bill and Why Does It Matter?
First, a brief note on the most important piece of federal legislation regulating cannabis that Congress has passed in the last decade and is currently updating. The Farm Bill is a complicated, fascinating, and consequential piece of legislation. It governs everything from farm subsidies to food stamps to school nutrition and, as of 2014, even hemp.
I have written thousands of words and used many pop culture references to describe the debates about cannabis in statehouses around the country just this year. But it’s time to address the elephant in the room: Specifically, Congress is currently considering proposals that would render much of that discussion moot as it debates the hemp provisions of the upcoming Farm Bill. The consequences could hardly be more substantial for the cannabis and alcohol industries.
What’s This “Loophole” People Are Talking About?
If you’re an old hand in the cannabis space, you know what I’m talking about. If you’re just dipping your toes into this discourse, get ready to hear the term “loophole” to describe the growth of the American consumable hemp industry.
We’ve written in detail about the “loophole,” including most recently here:
Shortly after Congress created this separate definition of hemp, savvy (and, in some instances, unsavory) operators concluded that Congress had created a loophole of sorts that would allow for products that contained cannabinoids from the cannabis plant – even those with psychoactive or intoxicating effects – as long as the concentration of delta-9 THC on a dry weight basis is not more than 0.3%. It was this interpretation of the Farm Bill, replicated in the 2018 version, that led to the proliferation of consumable products containing delta-8 THC, delta-10 THC, and the like.
Ergo, the loophole.
Maybe this is all semantics. The current consumable hemp industry probably falls within the common understanding of a loophole, so maybe it depends on how any given critic or supporter of hemp uses the term “loophole.” Some use it derisively to minimize the legitimacy of the consumable hemp industry. Others recognize that Congress chose to use certain terminology and hemp operators should not be punished for following the law as written.
So, Which Is It?
On one hand, I very much doubt that most members of Congress gave a moment’s thought to the implications of the specific words used governing hemp in the 2018 Farm Bill. That is likely a result of the hemp provisions being two pages in a bill that was over a thousand pages long and the lack of understanding at the time how that language could lead to a new and now thriving industry.
On the other, this new and thriving industry is exactly what they allowed. And that brings us to the central question facing Congress as it considers the future of hemp policy in America: Having allowed for a new and thriving industry to develop over the past almost seven years – intentionally or not and explicitly or not – should Congress simply close the “loophole” and shut down the consumable hemp industry or should it allow certain consumable hemp operators to continue to do business under a much more stringent regulatory regime?
This is not a simple question. There are serious people on both sides of the issue, and there are seemingly nonserious people involved as well (hey, we get what we vote for).
Having permitted the development of the consumable hemp industry, intentionally or ignorantly, Congress now faces a simple yet extraordinarily important question: Should we simply close the “loophole” entirely and essentially end the consumable hemp market? Or should we acknowledge certain reliance interests by hemp operators and choose to keep a consumable hemp market in place and then enact strong regulations in as a guardrail to ensure that any such products are safe and available only to adults?
We previously wrote:
And that brings us to the next Farm Bill and what it may portend for intoxicating hemp products. Though the cannabis portion of the bill will make up a tiny percentage of the Farm Bill’s text and there are enormous consequences to so many other provisions of the massive legislation, one would be wrong to assume there isn’t a street fight occurring in Washington between marijuana operators and hemp operators. Tens of millions of dollars – at least – are being spent on lobbying efforts to influence federal cannabis policy. Lawmakers are regularly fielding questions from constituents and their local media about the proliferation of hemp in its various forms. This is going to come down to the wire, and the specific language (likely with tweaks imperceptible to the average American and even many in Congress) will have enormous consequences for the cannabis industry in America. Truly, the devil – ahem, ghost – will be in the details.
So, What Will Happen to the “Loophole”?
We have written:
At the end of the day, I suspect Congress will land on some sort of compromise that allows for at least some versions of intoxicating hemp products. If true, I would expect Congress to direct some agency or agencies to adopt regulations governing the manufacturing, testing, marketing, and sales of such products. Operators targeting children or making health claims aimed at vulnerable populations are in the most jeopardy, and purveyors of novel cannabinoids and high-THC products should be concerned as well. Low-THC products, including the increasingly popular hemp beverages, seem to have occupied a different place in the public eye and may be codified, albeit subject to more definite regulation.
If I’m right, marijuana operators won’t be completely satisfied, but neither will hemp operators. Maybe I’m just crazy enough to believe Congress can find a compromise.
Recent developments have cast doubt on my prediction – even though I stand by it:
On June 5, 2025, the House Agriculture Appropriations Subcommittee voted to send a markup for an FY2026 appropriations bill to the full committee. The full House Appropriations Committee began consideration of the draft bill on June 11 but postponed a final vote. Among its many provisions, the draft bill includes a provision that effectively would prohibit the commercial production, sale, and distribution of certain hemp-derived cannabinoid products.
…
The draft appropriations bill would expand on the existing statutory definition of hemp to include industrial hemp products and exclude hemp-derived cannabinoid products (§759). The provision would define these two terms as follows:
Industrial hemp would be defined to mean hemp grown for “non-cannabinoid” uses, including for fiber or for grain/seed (e.g., use as a whole grain, oil, cake, nut, or hull) or for immature plants (e.g., microgreens or other edible hemp leaf products), as well as hemp grown for research purposes or as a viable seed to produce industrial hemp.
Hemp-derived cannabinoid product would be defined to mean “any intermediate or final product derived from hemp (other than industrial hemp), that … contains cannabinoids in any form; and … is intended for human or animal use through any means of application or administration, such as inhalation, ingestion, or topical application.”
Excluding hemp-derived cannabinoid products from the federal definition of hemp would prohibit production and sale of certain hemp-derived cannabinoids, derivatives, and extracts. Excluded cannabinoids would cover also non-naturally occurring and synthesized or manufactured compounds. The proposed provision would make other changes to the hemp definition by changing the allowable limits of THC — the leading psychoactive cannabinoid in the cannabis plant — to be determined on the basis of its total THC, including tetrahydrocannabinolic acid (THCA), instead of delta-9 THC.
When Will Congress Act?
Never an easy question and if I knew when Congress was going to act on any particular piece of legislation, I would be tanning on a beach instead of writing cannabis blog posts.
Here’s what we know. The 2018 Farm Bill was set to expire on September 30, 2023, in keeping with the general tradition of farm bills governing four to five years before a new farm bill was enacted. September 2023 has obviously long passed, and yet there has not been a new farm bill passed by Congress (or even voted on by both chambers of Congress). Instead, Congress has passed a series of continuing resolutions that allowed provisions of the 2018 Farm Bill to remain in place pending a new farm bill.
As of this writing, the House of Representatives seems to be more focused on the next farm bill than the Senate. As discussed above, the House Appropriations Committee is currently considering a proposed farm bill. If that bill is voted out of committee, the next step would be the full House floor, assuming that House leadership chooses to take that step. Once on the House floor, there will be opportunities for the full House to propose amendments to the bill before voting on it. If, for the sake of this discussion, the House of Representatives passes a farm bill, it will go to the Senate for its consideration.
In the Senate, there is a companion farm bill proposal that will need to travel a similar path – from subcommittee(s) to committees(s) and then for approval by the full Senate. If the full Senate approves the bill and it’s not identical to the House version – and that is almost certain to be the case given the complexities of a farm bill – it will go to a conference committee of House and Senate members. If that conference can agree to a single bill, it must then be passed by the full House and full Senate before it is sent to the president for signature.
We’ve miles to go before anything goes to the president. It would be a surprise if a bill left Congress in 2025 and far more likely to do so in 2026.
Does This Impact the Marijuana Industry?
Whether you believe congressional action on hemp will be a net positive or negative to the marijuana industry likely depends on whether you believe hemp and marijuana are operating in a zero-sum game or whether you believe that a regulated consumable hemp market will create a sort of rising tide effect that will socialize cannabis as a whole to the general public and, as a result, a liberalization of hemp will benefit marijuana companies. For those in the former camp, the concern is that cannabis consumers will choose to purchase cannabis from hemp operators because there are fewer rules and regulations that can make the buying experience at a marijuana dispensary more cumbersome than at a hemp shop. The latter camp believes that hemp can be a way for an average American to become introduced to the cannabis plant through products such as low-dose beverages and then grow more comfortable incorporating other cannabis products – including, where appropriate, marijuana – into their regular routines.
For the latter camp to have any real credibility, it should concede that hemp and marijuana should be placed on as close to a level playing field as possible.
For those who believe every sale of a consumable hemp product is a missed opportunity by the marijuana industry, their reluctance to allow more consumable hemp is understandable. I happen to believe that a more robust hemp industry — albeit stringently regulated as never before — will benefit both sides. In my view, let the people determine that regulated hemp-derived cannabis products marketed to adults are a pathway towards a broader understanding of the cannabis plant generally and how regulated hemp and marijuana can both play a role to the other’s benefit.
Does This Impact the Alcohol Industry?
When it comes to alcohol, I think it’s a simpler but more complicated question. There is compelling evidence that all age markets, but particularly the coveted younger adult market, are turning to cannabis over alcohol. This trend is particularly true when it comes to cannabis-derived edibles (“gummies”) and cannabis-infused beverages. Gummies have been successful and prevalent for a number of years (likely as legacy products from the cannabis prohibition era), and cannabis beverages have exploded onto the broader consumer market with eye-popping financial projections.
When it comes to distributors and retailers, it’s possible they don’t necessarily have a horse in the race. If hemp beverages are legitimized and regulated, they can allocate their offerings according to consumer demand; if alcohol continues to lose market share to hemp beverages, they can offer more hemp beverages to offset the decreased demand for alcoholic beverages. And if hemp beverages are illegal, they can go back to pushing alcohol as king.
Conclusion
There is nothing short of the future of the cannabis industry and anyone who does business with or against the cannabis industry at stake. And make no mistake, that includes companies ranging from hemp and marijuana operators to gas stations and grocery stores and to companies providing ancillary services to all of the above (including yours truly).
Rarely are there instances where Congress considers legislation that could, with the stroke of a presidential pen, destroy an entire industry. And perhaps its even more rare that we can see it happening in real time and recognize the consequences. Perhaps that’s why the battle is so fierce – it truly is an existential question for many cannabis stakeholders.
As Congress considers various proposals, I hope it will keep in mind the words of Robert Plant:
Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re on.
Thanks for stopping by.
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THE DEATH OF PRESUMPTION: Are Cell Phones Still “Residential” Post McLaughlin?
The TCPA landscape is being reshaped in real time and we’re here to bear witness. With the Supreme Court’s decision in McLaughlin Chiropractic Assocs. v. McKesson Corp., No. 23-1226, 2025 U.S. LEXIS 2385 (June 20, 2025), the Court has dealt a fatal blow to Hobbs Act deference in TCPA litigation. We at TCPAWorld have been covering the impact of this decision from day one, but in case you missed it, here’s the headline: district courts are no longer bound to follow FCC interpretations of the TCPA.
Instead, courts must independently determine the law’s meaning under ordinary principles of statutory interpretation. In essence, all bets are off – questions once thought settled are ripe for reconsideration. And forefront amongst these questions is this one – are cell phone users “residential telephone subscribers” for the purposes of the TCPA? Well … maybe.
As a quick refresher, Section 227(c) of the TCPA seeks to protect residential telephone subscribers from unwanted telephone solicitations. § 227(c)(1) (emphasis added). In Section 227(c)(2), Congress directed the FCC to promulgate regulations “to implement methods and procedures for protecting the privacy rights” of residential telephone subscribers. § 227(c)(3).
The relevant FCC regulation, 47 C.F.R. § 64.1200(c), provides: “No person or entity shall initiate any telephone solicitation to: … (2) A residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry. . .” (“DNC”). § 64.1200(c) (emphasis added).
But the TCPA does not define “residential.” And, unlike with Section 227(b) – which prohibits making a call using regulated technologies to several categories of phones, including “any telephone number assigned to a … cellular telephone service” – Congress was silent as to whether Section 227(c)’s protections extended to cell phones.
Through 47 C.F.R. § 64.1200(e), the FCC clarified that the rules set forth in § 64.1200(c) apply to wireless telephone numbers “to the extent described in the [FCC’s] Report and Order, CG Docket No. 02–278, FCC 03–153, ‘Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991’” (the “2003 Report and Order”). § 64.1200(e). In the 2003 Report and Order, the FCC not only determined that a wireless subscriber may register their number on the National DNC “to benefit from the full range of TCPA protections”, but also created a presumption that wireless numbers on the DNC are “residential subscribers.” 2003 Report and Order at ¶ 36.
For two decades then, and despite some creative arguments to the contrary, the law has been settled – cell phone numbers are residential for the purposes of the DNC rules. Under Section 227(c), courts generally allowed a claim to proceed if the plaintiff merely alleged that his or her cell phone number is used for residential purposes and is registered on the DNC Registry. See e.g., Barton v. Temescal Wellness, LLC, 525 F. Supp. 3d 195, 201–02 (D. Mass.), adhered to on denial of reconsideration, 541 F. Supp. 3d 138 (D. Mass. 2021) (holding that the 2003 Report and Order established “a more lenient pleading standard for residential subscriber at the motion to dismiss stage”)
But McLaughlin pulls the rug out from under this theory. While the Supreme Court case itself involved a declaratory ruling – and not a C.F.R. provision – the broad language does not preclude its application across the board. If an FCC regulation interpreting the TCPA is not grounded in the statute’s text, a district court may be free to disregard it. That includes 47 C.F.R. § 64.1200(e) and the FCC’s 2003 interpretation that wireless subscribers on the DNC registry are presumptively “residential.”
The implications are staggering. Courts are no longer constrained to accept the FCC’s conclusion that wireless numbers on the registry are residential subscribers. Instead, they can ask what Congress actually meant by “residential” and examine whether that term should apply to mobile phones at all. But does this necessarily mean that a court will come to a different conclusion? Probably not.
While the McLaughlin decision is barely a week old, we do have some data points from a post Chevron-deference landscape that could indicate the paths courts may take.
In Cacho v. McCarthy & Kelly, LLP, the Southern District of New York was amongst the first to address whether a cellphone qualified as a “residential telephone subscriber” under Section 227(c). In Cacho, the defendant argued that the “absence of any reference to cellular telephones in Section 227(c),” despite explicitly referencing them in Section 227(b), was evidence of “Congress’ intent to exclude cell phone users from the definition of ‘residential subscribers.’” 739 F. Supp. 3d at 203. However, the court disagreed, noting that section 227(b) “forbids the use of artificial and prerecorded messages to enumerated categories of phone technologies,” which includes “cellular telephone[s].” Id. at 204 (emphasis added). In contrast, Section 227(c), uses the term “residential subscriber” not in reference to particular category of technology, but to the “the type or identity of the subscriber to the technology.” Id. at 205 (emphasis added). According to the court, the omission of “line” in Section 227(c) underscores that the statute protects individuals based on their use of the phone for personal, domestic purposes, irrespective of whether it is a landline or cellphone. Id. Construing “residential subscriber” functionally, the court concluded that the term includes any individual using their phone for household purposes, aligning with the TCPA’s goal of safeguarding privacy. Id. at 206-207.
However, Cacho also indicates that this determination may require more than a mere presumption afforded by a user placing their number on the National DNC Registry. Instead, the court took into consideration a multitude of facts pleaded in the complaint to conclude that the plaintiff therein was a residential telephone subscriber:
“That cellphone is ‘Plaintiff’s personal phone that he uses for personal, family, and household use.’ Indeed, Plaintiff ‘maintains no landline phones at his residence and has not done so for at least 15 years and primarily relies on cellular phones to communicate with friends and family.’ The Complaint enumerates the domestic tasks that he performs with his phone, including ‘sending and receiving emails, timing food when cooking, and sending and receiving text messages,’ and avers that ‘the phone is not primarily used for any business purpose.’ Collectively, these allegations exceed ‘conclusory’ boilerplate, and adequately plead that Plaintiff used his cellphone for residential purposes, such that he was a residential subscriber for purposes of the TCPA and its implementing regulations.”
Id. (internal citations omitted).
Other courts have echoed this view. In Lyman v. QuinStreet Inc., the court rested its decision on “both binding Ninth Circuit precedent and the applicable regulation.” Lyman, 2024 WL 3406992 at *3. The Ninth Circuit precedent the court was referring to was Chennette v. Porch.com, Inc., which held that cellphones used for “personal and business purposes [are] presumptively residential” under Section 227(c), a conclusion reinforced by FCC regulations extending protection to wireless lines. Id. But the Court noted that it would reach the same conclusion based on the statutory text:
“Finally, the Court accords due respect to the FCC’s interpretation under pre-Chevron principles. As the Court has done here, the Court needs only ‘independently identify and respect such delegation of authority, police the outer statutory boundaries of [that delegation], and ensure that [the agency exercises its] discretion consistent with the APA.’ Here, Congress has expressly conferred discretionary authority on the agency to flesh out the TCPA. Using its discretion within the boundaries of its delegation, the agency has created a presumption that a cell phone registered on the Do Not Call Registry is a residential phone, a presumption that has lasted for more than two decades. The FCC’s interpretation ‘rests on factual premises within the agency’s expertise,’ thus giving its interpretation ‘particular power to persuade, if lacking power to control.’ In this context, it is especially informative and particularly persuasive. Id. In any event, however, the Court would reach the same conclusion in the absence of any FCC interpretation of the TCPA’s statutory text.”
Id. at *4 (internal citations omitted).
Similarly, in Lirones v. Leaf Home Water Sols., LLC, No. 5:23-CV-02087, 2024 WL 4198134 (N.D. Ohio Sept. 16, 2024), the court held that “according to the TCPA’s plain language and dictionary definitions of ‘residence’ and ‘subscriber,’ ‘a residential subscriber is one who maintains a phone for residential purposes … i.e., for personal activities associated with his or her private, domestic life.’” Id. at *6. Like in Lyman, while the court found the FCC’s interpretation persuasive, it noted that “based on the text of the statute and tools of statutory interpretation, [it] would reach the same conclusion in the absence of any FCC interpretation of the term ‘residential subscriber.’” Id. at *7.
In Lirones, the court also addressed instances of other district courts dismissing Section 227(c) claims brought by cellular telephone users, noting that in many of these cases the plaintiff did not plead that the cellular telephone number called was used for residential purposes. Id. at *5. See e.g., Cunningham v. Rapid Response Monitoring Servs., Inc., 251 F. Supp. 3d 1187, 1201 (M.D. Tenn. 2017) (dismissing Section 227(c) claim because the plaintiff pled no facts sufficient for the court to conclude that he used his cellular number for residential purposes).
But even before McLaughlin and Loper, district courts have deviated from the FCC’s interpretation. In Gaker v. Q3M Ins. Sols., No. 3:22-CV-00296-RJC-DSC, 2023 WL 2472649 (W.D.N.C. Feb. 8, 2023), the court held that “the FCC’s rulemaking authority under section 227(c) extends only to unwanted telephone solicitations directed at ‘residential telephone subscribers.’” Id. at *3. The court also noted that Congress’s specific reference to ‘cellular telephone service’ in § 227(b) evidenced that it was aware of the distinction between a cellular telephone and a residential telephone and “purposely protected only ‘residential telephone subscribers’ under § 227(c).” Id. Further, in a sharp break from other district courts that have cited heightened privacy invasions as a reason to include cell phone users within “residential telephone subscribers”, the court held “cell phones do not present the same concerns as residential telephones [because] the findings in the TCPA show a concern for privacy within the sanctity of the home [and] cell phones are often taken outside of the home and often have their ringers silenced, presenting less potential for nuisance and home intrusion.” Id.
Similarly, in Cunningham v. Sunshine Consulting Grp., LLC, No. 3:16-cv-2921, 2018 WL 3496538, at *6 (M.D. Tenn. July 20, 2018), the court held that “the language of the TCPA specifically provides that the regulations implemented pursuant to Subsection 227(c) concern only ‘the need to protect residential telephone subscribers’ privacy rights.”
And some courts in the Eleventh Circuit have observed that they would have reached a different conclusion were it not for Hobbs Act deference: in Turizo v. Subway Franchisee Advert. Fund Tr. Ltd., 603 F. Supp. 3d 1334, 1342 (S.D. Fla. 2022), the court characterized the inclusion of cell phone subscribers within Section 227(c) as “an unauthorized expansion of the private right of action for violations of the TCPA’s do-not-call provision”, noting that “when Congress granted the FCC authority to create the DNC Registry via section 227(c)(3), [it] intentionally withheld from the FCC any authority to create a registry that included cellular telephone numbers.”
Welcome to the post-McLaughlin era. The presumptions are gone. The pleading bar is higher. And the definition of “residential telephone subscriber” just got a lot more complicated.
AI CALLS AFTER MCLAUGHLIN: Why Consent Is Still Required
I’ll keep this short and sweet.
The Supreme Court’s decision in McLaughlin Chiropractic v. McKesson has undeniably altered how the Telephone Consumer Protection Act will be enforced. But for companies using artificial intelligence voice technologies to communicate with consumers, the crucial question remains: Does this ruling actually provide a viable escape from the TCPA’s restrictions?
Previously, the FCC in its February 2024 Declaratory Ruling clarified that the TCPA’s prohibition on “artificial or prerecorded voice” calls applies to current AI technologies that mimic human voices or generate call content from a prerecorded voice.
The Court’s 6-3 decision in McLaughlin held that federal district courts are no longer bound by an agency’s interpretation of a statute. Instead, judges must independently analyze the law, giving “appropriate respect” to the agency view.
However, this ruling does not change the reality for companies using artificial intelligence voice technologies. The text of the TCPA is clear: it prohibits calls made using an “artificial OR prerecorded” voice without prior express consent. There is no viable legal argument that a call generated by Artificial Intelligence is not “artificial.”
One might argue that a sophisticated, conversational AI that generates responses in real-time is not “prerecorded” in the traditional sense of a static audio file being played. This is a plausible argument, and a debate that can now happen in court.
But that’s only half the battle. The real challenge is the word: artificial. Arguing that a technology literally named “Artificial Intelligence” is not, in fact, “artificial” is a formidable, if not impossible, task.
So to be clear: The use of AI to make voice calls without consent is illegal under the plain text of the TCPA.
The McLaughlin decision does not create a loophole to make this conduct lawful.
Supreme Court Allows Fuel Producers to Contest California’s Emissions Rules
For decades, California has been granted unique deference in setting Clean Air Act (CAA) emissions limitations for California-sold vehicles through use of a state-specific waiver.
California’s state-specific waiver allows the state to impose stricter emission standards than those issued at the federal level. In recent years, California has aggressively used this state-specific waiver to target greenhouse gas emissions and mandate a shift toward electric vehicles (EVs). This approach has been controversial and — unsurprisingly — led to litigation as product manufacturers of all kinds factor in California regulatory particularities in determining their nationwide mix of products.
We have chronicled recent, though frequent, push-and-pull between states like California seeking stricter environmental controls and others favoring less regulations. (e.g.,here and here.) And if you have been following the ongoing saga of state-led climate regulation, the US Supreme Court’s new decision in Diamond Alternative Energy, LLC v. EPA is a must-read. It addresses environmental policy, federalism, and the question of who gets to challenge government action in court. Below, we break down what happened and why it matters to the regulated community.
CAA and California’s Climate Ambitions
California has long been the nation’s laboratory by enacting aggressive vehicle emissions standards. Under the CAA, the US Environmental Protection Agency (EPA) sets nationwide emissions rules for new cars, but it allows California, as a result of US Congress recognizing its unique air quality challenges like smog, to seek a waiver to impose stricter CAA standards. Other states can then choose to adopt California’s rules but are not permitted by CAA to unilaterally create their own rules in the same manner as does California. The rules, as currently in effect, require automakers to sell more EVs and limit average greenhouse gas emissions across their fleets. As of now, 17 other states and Washington, DC, have followed California’s lead, together representing about 40% of the buyers in the US auto market.
The Legal Challenge: Who Gets to Sue?
Enter the fuel producers — companies that make and sell gasoline, diesel, and ethanol. Before the Court, fuel producers argue that California’s rules, by reducing the number of gas-powered cars on the road in favor of EVs which can meet California’s requirements, directly hurt their bottom line because less demand for gasoline means less revenue. The litigation focuses on EPA’s approval of California state-specific waiver, claiming the agency overstepped its authority by greenlighting state rules aimed at global climate change rather than addressing local air quality.
As with many challenges, before reaching the merits, reviewing courts needed to determine if fuel producers had standing to sue. Legal standing requires plaintiffs to show that they have suffered a concrete injury, that the injury is caused by the challenged action and that a favorable court decision would likely redress that injury. “Injury in fact,” causation, and redressability are often referred to as the three prongs of standing analysis. The Supreme Court frequently reviews standing. Last term, the Court reviewed the organizational standing case FDA v. Alliance for Hippocratic Medicine (for more, see here).
The Court’s Decision
The DC Circuit Court of Appeals determined that the challengers lacked standing because they depended on claims that automakers could have asserted but did not pursue. It reasoned that even if it struck down EPA’s approval of California’s rules, the holding might not lead automakers to actually build more gas-powered cars. After all, consumer demand for EVs is surging, and manufacturers have already invested heavily in electrification. Without clear evidence that the market would shift back toward gasoline vehicles, the court found the fuel producers’ alleged injury too speculative.
The Supreme Court, in a 7-2 decision authored by Justice Brett Kavanaugh, disagreed. The majority held that the fuel producers had standing to challenge EPA’s approval. Here is why:
Injury in Fact: The Court found it “straightforward” that fuel producers are financially harmed by regulations designed to reduce gasoline consumption. Indeed, it noted that the point of the rules was to compel a transition away from gasoline-powered vehicles.
Causation: It ruled that the link between California’s regulations and reduced fuel sales is direct. The regulations compel automakers to build more EVs and fewer cars that use gas or other liquid fuels, something that directly affects the fuel producers.
Redressability: Here, the Court pushed back hardest against the circuit court’s decision. The majority reasoned that it’s “predictable,” based on common sense and the record, that if the regulations were invalidated, at least some automakers would build more gas-powered cars leading to more fuel sales. The Court emphasized that even a small increase in sales would satisfy the legal standard.
The Court also rejected the idea that plaintiffs must provide expert affidavits or direct evidence from automakers about how they would respond to regulatory changes. Instead, it noted that it is enough for plaintiffs to show a “predictable chain of events” based on economic logic and the government’s own statements about the regulations’ impact.
Practical Takeaways
This ruling is significant for several reasons:
Broader Access to the Courts: The decision may lower the bar for industry plaintiffs to challenge environmental regulations, especially when they can show a direct economic impact — even if the market is complex and third-party behavior is involved. Justice Ketanji Brown Jackson’s dissent argues that the Supreme Court does not apply standing doctrine “evenhandedly” and notes that allowing petrochemical companies to sue here is inconsistent with precedent and “comes at a reputational cost for the Court, which is already viewed as being overly sympathetic to corporate interest.” Justice Jackson concluded that the Court should have refrained from deciding this case.
Increased Regulatory Uncertainty: By allowing fuel producers to challenge EPA’s approval of California’s rules, the Court has injected new uncertainty into the future of state-led climate initiatives. If the fuel producers ultimately prevail on the merits, it could upend California’s (and other states’) ability to push the auto industry toward electrification of changing the kinds of cars they sell.
A Signal to Agencies and States: The Court’s skepticism toward arguments that regulations are “irrelevant” because the market has already shifted should be taken as a warning to regulators. If an agency is still enforcing and defending a rule, do not expect courts to believe it has no real-world effect.
The Bottom Line
The decision did not determine whether California’s rules are lawful; that fight is ongoing in the courts, in Congress, and at EPA. But by clearing the way for fuel producers to have their day in court, the justices have set one stage for a high-stakes battle over the future of vehicle emissions regulation, the scope of state authority, and the role of courts in refereeing these disputes. For anyone monitoring the intersection of climate policy, industry, and the law, this is a case worth following.
Upcoming OSHA and U.N. Meetings May Trigger Changes in U.S. Hazard Communication Standards
On June 24, 2025, the Occupational Safety and Health Administration (OSHA) will conduct a virtual public meeting to discuss the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The primary focus of this meeting is to gather stakeholder input and prepare for the upcoming forty-eighth session of the United Nations Economic and Social Council’s Sub-Committee of Experts on the GHS, which will take place in Geneva, Switzerland, from July 7 to July 9, 2025.
OSHA is expected to provide updates on recent regulatory activities, discuss potential changes to the Hazard Communication Standard (HCS) to align with the latest GHS revisions, and solicit feedback from industry representatives, labor organizations, and other interested parties. Key topics will include hazard classification, labelling requirements, safety data sheets, and the impact of GHS updates on U.S. regulations and workplace safety.
Quick Hits
On June 24, 2025, OSHA will hold a virtual public meeting to discuss updates to the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and gather stakeholder input.
The upcoming meeting of the United Nations’ Sub-Committee on the GHS will be a key forum for discussing and adopting revisions to the GHS, which OSHA will later evaluate and incorporate into U.S. regulations.
OSHA aims to improve chemical hazard communication and facilitate international trade by aligning U.S. regulations with the latest GHS updates, ensuring clarity and consistency for workers and emergency responders.
OSHA’s Hazard Communication Standard is explicitly designed to align with the GHS, which is an internationally agreed-upon system for classifying and labelling chemicals. The GHS is periodically revised and updated by the U.N. Sub-Committee based on new scientific information, stakeholder input, and evolving best practices. The July 7–9, 2025, Geneva, Switzerland, meeting is one of the key forums where such revisions are discussed and adopted by consensus among participating countries, including the United States.
When the Sub-Committee adopts new or revised criteria, label elements, or safety data sheet (SDS) requirements, OSHA reviews these changes to determine how best to incorporate them into U.S. regulations. This process ensures that U.S. chemical safety standards remain harmonized with those of major trading partners and reflect the latest scientific and technical knowledge.
Following the Geneva meeting, OSHA is expected to evaluate the adopted GHS revisions and initiate the rulemaking process to update the HCS as necessary. This may include:
revising hazard classification criteria for physical, health, or environmental hazards;
updating required label elements, such as signal words, pictograms, hazard statements, and precautionary statements;
modifying the format and content requirements for safety data sheets and
addressing new or emerging hazards identified at the international level.
For example, OSHA’s most recent update to the HCS (finalized in 2024) was based on the seventh revised edition of the GHS, with select elements from the eighth edition. This update was informed by previous UN GHS sub-committee meetings and reflects the ongoing process of international harmonization.
After the Geneva meeting, OSHA is expected to engage with U.S. stakeholders—including industry representatives, labor organizations, and safety professionals—to gather input on how the new GHS provisions should be implemented domestically. OSHA relies on the stakeholders’ input to update regulations that are designed to be practical, effective, and tailored to the needs of U.S. workplaces.
OSHA also provides transition periods for compliance, allowing chemical manufacturers, importers, distributors, and employers time to update their hazard communication programs, labels, and SDSs in accordance with the new requirements.
By incorporating the outcomes of the Geneva meeting into U.S. regulations, OSHA aims to:
improve the clarity, consistency, and effectiveness of chemical hazard communication for workers and emergency responders;
reduce confusion and compliance burdens for companies operating in multiple countries; and
facilitate international trade by ensuring that U.S. chemical products meet global labelling and classification standards.
Employers that work with materials that fall under GHS probably will not see dramatic changes in the regulations they must abide by. Instead, those changes will likely be incremental and will first be seen by those that bear the responsibility for labelling chemicals.
Does HIPAA Apply To My Business?
Varnum Viewpoints:
HIPAA applies outside of healthcare providers. If you offer employee health benefits, especially through a self-funded plan, HIPAA applies to your health plan.
You may be a covered entity or business associate. Health plans, providers, and vendors handling health data are subject to HIPAA, often to differing extents.
HIPAA has specific compliance duties. Requirements include privacy notices, policies, risk assessments, and business associate agreements.
The Health Insurance Portability and Accountability Act (HIPAA) applies far more often than many realize, including when a company outside of the healthcare sector provides certain types of health benefits to its own employees. While HIPAA compliance quickly gets complex, determining if it applies to your business does not need to be. This advisory includes helpful definitions of key terms, including Protected Health Information (PHI), the Privacy Rule, and the Security Rule.
What Is a HIPAA Covered Entity?
HIPAA applies only to covered entities, including health care providers and health plans, and their business associates. Many covered entities already know they are subject to HIPAA. This includes those in the healthcare sector, such as doctors, hospitals, pharmacies, and insurance companies, for whom HIPAA compliance should be an integral part of daily business.
Does My Employee Health Plan Make My Company a Covered Entity?
Employer-sponsored health plans are also covered entities. The design of that health plan will impact how HIPAA applies, but the Privacy Rule and the Security Rule make it clear: if employees receive health benefits, HIPAA will apply to the health plan, even if it does not apply to the company in its role as an employer generally. If an employer maintains a fully-insured plan and the insurer is handling most or all of the administration of the coverage, the employer may not receive much PHI, if any. However, as more plans move toward self-funding and self-administration, HIPAA will apply to more functions carried out by the employer.
Who Is a HIPAA Business Associate?
A business associate is any entity that creates, receives, or transmits PHI in relation to a covered entity. Business associates are subject to the same HIPAA compliance rules as covered entities, and the same penalties apply for violation of these rules. In addition, covered entities and their business associates must enter into “business associate agreements” which explicitly require the business associate to comply with HIPAA and may set forth other terms such as notification and indemnification provisions.
As with covered entities in the healthcare sector, most business associates will know that their work is subjecting their business to HIPAA. However, any business that provides products and services that are or could be used to provide healthcare should carefully assess whether and to what extent HIPAA applies to their business. For example, SAAS providers and app developers may have access to PHI, making them a business associate that must comply with HIPAA. Some covered entities will push their vendors to enter into business associate agreements, even if it does not directly apply.
What Is PHI?
Protected health information is any individually identifiable health information that is created, received, stored, or transmitted by a covered entity, an entity subject to HIPAA, such as a health care provider, insurance company, or employer health plan, or their business associates, those entities who access PHI on behalf of the covered entity.
What Is the HIPAA Privacy Rule?
The Privacy Rule is the part of HIPAA that protects PHI through limiting who can access it, how it is used, and providing individuals with rights relating to their PHI.
What Is the HIPAA Security Rule?
The Security Rule is the part of HIPAA that covers how electronic creation, storage, use, and disclosure of PHI must be done to ensure the privacy of PHI.
What Are My HIPAA Compliance Requirements?
When HIPAA applies, the entity is expected to comply with HIPAA’s broad range of requirements. Key compliance requirements include providing a notice of privacy practices, naming a compliance officer responsible for complying with HIPAA, establishing policies and procedures, conducting a risk assessment, and entering into necessary agreements, such as business associate agreements. See our detailed explanation, HIPAA and Employee Benefits: The Basics of Compliance.
Spilling Secrets: Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk [Podcast, Video]
This week, on our Spilling Secrets podcast series, our panelists discuss the current status of non-compete agreements across the nation.
Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk
Non-compete legislation is evolving rapidly at the state level, with new laws taking effect soon in Arkansas, Kansas, Virginia, and Wyoming. Looking ahead, pending bills in over a dozen states could reshape how employers approach restrictive covenants.
In this episode, Epstein Becker Green attorneys Peter A. Steinmeyer, Daniel R. Levy, David J. Clark, and Carolyn O. Boucek discuss the new and proposed state non-compete laws and their implications for employers, as well as alternative tools that can be used to address these restrictions. From expanded protections for low-wage workers in Virginia to Kansas’s focus on non-solicit provisions, this episode offers actionable takeaways to help employers stay compliant.
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AI Contracts in Health Care: Avoiding the Data Dumpster Fire
For AI companies in the health care space, data is everything. It fuels model performance, drives product differentiation, and can make or break scalability. Yet too often, data rights are vaguely defined or completely overlooked in commercial agreements. That is a critical mistake.
Whether you are contracting with a health system, integrating into a digital health platform, or partnering with an enterprise vendor, your data strategy needs to be reflected clearly and precisely in your contracts. If it is not, you may find yourself locked out of the very assets you need to grow — or worse, liable for regulatory violations you never anticipated.
This article outlines three areas where we see health AI companies exposed to the most risk: training rights, revocation and retention terms, and shared liability. These are not just technical contract points. They are foundational to your valuation, your compliance posture, and your long-term defensibility.
1. Training Rights: Define Them with Precision
Most health AI vendors want some right to use client data to improve or train their models. That is expected. The problem is that many agreements use imprecise language like “improving services” or “analytics purposes” to describe what the vendor can actually do with the data. In the health care context, this can be legally problematic.
Under HIPAA, a use of protected health information (PHI) for purposes beyond patient treatment by a covered entity, payment, or health care operations, generally requires patient authorization. As a result, use cases like model training or product improvement require a strong case that the activity qualifies as the covered entity’s health care operations — otherwise it will require patient authorization. Even so-called “anonymized” or “de-identified” data is not always safe if it has not been properly and fully de-identified under the HIPAA standard for de-identification.
If your business model relies on using client data for generalized model training, you need to be explicit about that in your contract. This includes clarifying whether the data is identifiable or de-identified, what de-identification method is being used, and whether the outputs of that training are limited to the specific client’s model or can be used across your entire platform.
On the flip side, if you are offering a model-as-a-service that is customized to each client and does not rely on pooled training data, you should say that clearly and ensure the contract supports that structure. Otherwise, you risk a dispute down the road about how data can be used or whether outputs were improperly shared across clients.
It is also critical to align this provision with your business associate agreement (BAA) if you are processing PHI. A mismatch between the commercial terms and the BAA can raise compliance issues and raise red flags, especially during diligence. Remember, in most cases, if your commercial agreement states that you may de-identify data, but your BAA says that de-identification is prohibited, the BAA likely governs as a result of the typical conflict language in the BAA favoring the BAA when PHI is at issue.
2. Revocation and Retention: Address What Happens When the Contract Ends
Too many AI contracts are silent on what happens to data, models, and outputs after a contract is terminated. That silence creates risk on both sides.
From a client’s perspective, allowing a vendor to continue using the client’s data after termination to train future models can be problematic under HIPAA and even feel like a breach of trust. From the vendor’s perspective, losing rights to previously accessed data or trained outputs can disrupt product continuity or future sales.
The key is to define whether rights to use data or model outputs survive termination, and under what conditions. If you want to retain the ability to use data or trained models post-termination, that should be an express, bargained-for right. If not, you must be prepared to unwind that access, destroy any retained data, and potentially retrain models from scratch.
This is particularly important when derivative models are involved. A common trap is allowing the vendor to claim that once data is used to train a model, the model is no longer tied to the underlying data. Courts and regulators may not agree if that model continues to reflect sensitive patient information.
At minimum, your agreement should answer three questions:
Can the vendor retain and continue to use data accessed during the contract?
Do any rights to trained models or outputs survive termination?
Is there an obligation to destroy, de-identify, or return data after the relationship ends?
For higher-value relationships, consider negotiating a license that survives termination, coupled with appropriate compensation and confidentiality obligations. In the health care context, this post-termination license will generally involve only de-identified data. Otherwise, build in a data return or destruction clause that outlines how and when data must be returned or destroyed.
3. Shared Liability: Clarify Responsibility for Downstream Harms
One of the most overlooked issues in health AI contracting is liability allocation. AI-generated recommendations can influence medical decisions, billing practices, and patient communications. When something goes wrong, the question becomes: who is responsible?
AI vendors typically position themselves as only a tool for health care providers and try to disclaim liability for any downstream use. Health care providers, on the other hand, increasingly expect vendors to stand behind their products. This is especially true if those products generate clinical notes, diagnostic suggestions, or other regulated outputs.
The reality is that both sides carry risk, and your contract needs to reflect that. Disclaimers are important, but they do not replace a thoughtful risk allocation strategy.
First, vendors should require that their clients include representations that the client has the appropriate authorizations or consents under applicable laws, including HIPAA, the FTC Act, and state privacy laws, for all processing of data by the vendor contemplated by the agreement. The use of client data for training and processing, or otherwise, should be clearly articulated in the agreement. This helps protect you if a client later claims they were not aware of how their data was used or that it was used improperly.
Second, consider indemnity provisions tied to misuse of third-party intellectual property, violation of patient privacy, or regulatory enforcement actions. For example, if your model relies on PHI that was not properly authorized or de-identified under HIPAA, and that triggers an investigation by the Office for Civil Rights, you may be on the hook.
Third, be thoughtful about limitations on liability. Many Software as a Service (SaaS) agreements use a standard cap tied to fees paid in the prior 12 months. That may be insufficient in the health AI context, especially if the model is being used in a clinical setting. A tiered cap based on use case (e.g., documentation vs. clinical decision support) may be more appropriate.
The Takeaway
Data terms are not boilerplate in health AI contracts. They are a core part of your business model, your compliance posture, and your defensibility in the market. If you do not define your rights around training, revocation, and liability, someone else will, typically in a lawsuit or regulatory action.
For AI vendors, the goal should be to build trust through transparency. That means clear language, reasonable limitations, and defensible use cases. The companies that succeed in this space will not just build good models, but they will also build good contracts around them.
If you are looking to operationalize this strategy, audit your top five contracts this quarter. Flag any vague data rights, mismatched BAAs, or termination gaps. And if needed, renegotiate before your model performance, client trust, or legal exposure gets tested.
Employer Health Plans Must Report Number of Covered Children in New Mexico
Employers will be required to report, by July 1, 2025, the number of children in New Mexico covered by their employer-sponsored group health plans. The reporting requirement comes from regulations under the state’s Vaccine Purchasing Act, one of a handful of state laws that put surcharges on health insurers, group health plans, third-party administrators, or some combination, to fund states’ purchases of vaccinations for children in the relevant state.
Quick Hits
New Mexico’s Vaccine Purchasing Act requires employers that sponsor plans and health insurers to report the total number of children covered during the past year.
The purpose of the reporting is to help the state determine the quantity of vaccines to purchase.
The deadline to report the information is July 1, 2025.
Employers and health insurers must report to the New Mexico Office of the Superintendent of Insurance the total number of children in New Mexico who were enrolled in the plan during any part of the previous year and were under the age of nineteen as of the previous December 31. Not included are any children who are not residents of New Mexico, children who are members of a Native American tribe, and children who are enrolled in Medicaid or another medical assistance program administered by the state.
Each year, the state will estimate the amount of money needed to purchase, store, and distribute vaccines to all insured children in the state, including a reserve of 10 percent of the amount estimated.