Human Authorship Required: AI Isn’t an Author Under Copyright Act
The US Court of Appeals for the District of Columbia upheld a district court ruling that affirmed the US Copyright Office’s (CO) denial of a copyright application for artwork created by artificial intelligence (AI), reaffirming that human authorship is necessary for copyright registration. Thaler v. Perlmutter, Case No. 23-5233 (D.C. Cir. Mar. 18, 2025) (Millett, Wilkins, Rogers, JJ.)
Stephen Thaler, PhD, created a generative AI system that he named the Creativity Machine. The machine created a picture that Thaler titled, “A Recent Entrance to Paradise.” Thaler applied to the CO for copyright registration for the artwork, listing the Creativity Machine as the author and Thaler as the copyright owner.
The CO denied Thaler’s application because “a human being did not create the work.” Thaler twice sought reconsideration of the application, which the CO denied because the work lacked human authorship. Thaler subsequently sought review in the US District Court for the District of Columbia, which affirmed the CO’s denial of registration. The district court concluded that “[h]uman authorship is a bedrock requirement of copyright.” Thaler appealed.
The DC Circuit reaffirmed that the Creativity Machine could not be considered the author of a copyrighted work. The Copyright Act of 1976 mandates that to be eligible for copyright, a work must be initially authored by a human being. The Court highlighted key provisions of the Copyright Act that only make sense if “author” is interpreted as referring to a human being. For instance:
A copyright is a property right that immediately vests in the author. Since AI cannot own property, it cannot hold copyright.
Copyright protection lasts for the author’s lifetime, but machines do not have lifespans.
Copyright is inheritable, but machines have no surviving spouses or heirs.
Transferring a copyright requires a signature, and machines cannot provide signatures.
Authors of unpublished works are protected regardless of their nationality or domicile, yet machines do not have a domicile or national identity.
Authors have intentions, but machines lack consciousness and cannot form intentions.
The DC Circuit concluded that the statutory provisions, as a whole, make human activity a necessary condition for authorship under the Copyright Act.
The DC Circuit noted that the human authorship requirement is not new, referencing multiple judicial decisions, including those from the Seventh and Ninth Circuits, where appellate courts have consistently ruled that authors must be human.
Practice Note: Only humans, not their tools, can author copyrightable works of art. Images autonomously generated are not eligible for copyright. However, works created by humans who used AI are eligible for copyright depending on the circumstances, how the AI tool operates, and to what degree the AI tool was used to create the final work. Authors whose works are assisted by AI should seek advice of counsel to determine whether their works are copyrightable.
Is Registration As A Foreign Corporation A Form Of Compelled Consent?
Not too long ago, I wrote about a bill that is currently pending in the Nevada legislature, AB 158. This bill would authorize Nevada courts to exercise general personal jurisdiction over entities on the sole basis that the entity:
is organized, registered or qualified to do business pursuant to the laws of this State;
expressly consents to the jurisdiction; or
has sufficient contact with Nevada such that the exercise of general personal jurisdiction does not offend traditional notions of fair play and substantial justice.
The first alternative is obviously grounded upon the U.S. Supreme Court’s decision in Mallory v. Norfolk Southern Ry. Co., 600 US 122 (2023). In the case, the Supreme Court in a 5-4 decision held that a Pennsylvania statute did not offend the Due Process clause of the United States Constitution. The Pennsylvania statute provided that a company’s registration as a foreign corporation” is deemed “a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over” the corporation. 42 Pa. Cons. Stat. § 5301(a)(2)(i).
In a forthcoming article, Professor Jason Jarvis argues:
Involuntary consent is an oxymoron. Consent must be knowing and voluntary, and consent extracted by threat is coerced and invalid.
Professor Jarvis posits a case-by-case approach to consent whereby the “voluntariness of a corporation’s decision to do business in a state depends on the particular state and the particular corporation”.
The provisions of the California Civil Code concerning contracts and consent line up nicely with Professor Jarvis’ premise. Consent is “essential” to the formation of a contract, Cal. Civ. Code § 1550(2), and that consent must be “free”, Cal. Civ. Code § 1565(1). Consent is neither “real” nor “free” when obtained through: duress, menace, fraud, undue influence or mistake. Cal. Civ. Code § 1567.
Texas Supreme Court Confirms Limits of Fifteenth Court of Appeals’ Jurisdiction
The Texas Supreme Court issued a per curiam opinion that resolved a split among Texas courts of appeals regarding the jurisdiction of the Fifteenth Court of Appeals. Addressing motions to transfer appeals out of the Fifteenth Court, in Kelley v. Homminga, No. 25-9013 and Devon Energy Production Co. v. Oliver, No. 25-9014, the Court held that the Fifteenth Court does not have jurisdiction over all civil appeals in Texas.
Instead, the Court concluded the Fifteenth Court’s jurisdiction is limited to appeals that are (1) within its exclusive jurisdiction (i.e., only those appeals involving the state or appealed from the Business Court), or (2) transferred to it by the Supreme Court for docket equalization as the Texas Government Code requires.
Scope of Geographic Reach Versus Subject-Matter Jurisdiction
The Texas Supreme Court explained that through a combination of state-wide geographic reach limited by legislated subject-matter jurisdiction, the Fifteenth Court has authority to decide appeals from any Business Court across the state. Senate Bill 1045, which created the Fifteenth Court, also granted it jurisdiction to decide “certain civil cases” that may arise anywhere in the state. The “certain civil cases” within the Court’s subject-matter jurisdiction is limited to only three substantive categories of civil appeals: (1) cases brought by or against the state, with enumerated exceptions; (2) cases involving challenges to the constitutionality or validity of state statutes or rules where the attorney general is a party; and (3) “any other matter as provided by law.” The third category includes two types of appeals: those from the newly created Business Court and those transferred to it by the Texas Supreme Court in order to equalize dockets among the courts of appeals.
Procedural Posture
In both Kelley (Galveston County) and Devon Energy (DeWitt County), defendants noticed their appeals to the Fifteenth Court, asserting that the court’s statewide jurisdiction authorized it to hear their cases. The plaintiffs in each case moved to transfer the appeals to the regional courts of appeals that traditionally hear appeals from the counties where the trial courts are located—specifically, the First or Fourteenth Courts in Kelley and the Thirteenth Court in Devon Energy.
The Fifteenth Court denied both transfer motions over dissents. Both majority opinions (2-1) held that because Texas statutes grant the Fifteenth Court general appellate jurisdiction over civil cases statewide, the Fifteenth Court could decide the appeals. While the First Court of Appeals agreed with the Fifteenth Court’s majorities, the Thirteenth and Fourteenth Courts of Appeals disagreed. Because neither the Kelley nor Devon Energy appeal fell into the three substantive categories of civil appeals over which the Fifteenth Court had subject-matter jurisdiction, the Texas Supreme Court granted the motions and ordered the appeals transferred back to the courts of appeals in the districts in which the trial courts resided.
New Jurisprudential Guidance
The Texas Supreme Court applied new terminology (gleaned from collaborative writings of Justice Antonin Scalia and Bryan A. Garner) to the jurisprudence guiding statutory interpretation. The “fair meaning” standard of statutory interpretation requires courts to discern a statute’s objectives from its plain text while also considering the broader statutory context. The Court’s view is that this approach differs from strict textualism, as it seeks to harmonize all provisions of a statute into a cohesive whole rather than focusing on the hyper literal meaning of individual words. Also animating its decision, the Court explained that reversal was necessary to avoid “gamesmanship” in seeking an appellate venue and thwarting the legislature’s intent that the Fifteenth Court give special attention to categories of cases in which it has exclusive jurisdiction and not be overburdened with cases outside of its exclusive jurisdiction. The Texas Supreme Court’s decisions in Devon Energy and Kelley provide welcome clarity on the jurisdiction of the Fifteenth Court of Appeals.
ADGM Courts and Dubai Courts Sign Memorandum on Reciprocal Enforcement of Judgments
On 14 January 2025, the Abu Dhabi Global Market (ADGM) Courts and onshore Dubai Courts signed a memorandum of understanding (MoU) for the reciprocal enforcement of judgments. The MoU, which is publicly available, took effect the day it was signed and the mechanism it sets forth is available for parties seeking to utilize its reciprocal enforcement mechanisms.
The MoU, which follows approximately seven years after a similar MoU was signed between the ADGM Courts and the onshore Abu Dhabi Courts in February 2018, is designed to facilitate judicial cooperation between the ADGM and Dubai relating to mutually enforceable judgments.
Prior to the enactment of the MoU, parties seeking to enforce an ADGM Courts judgment in Dubai had to either go through the onshore Abu Dhabi Courts and then seek to rely on Federal Law No. 10 of 2019 (known as the Judicial Relations Law), which provides for reciprocal judgment enforcement between the onshore courts of the seven emirates, or seek recognition and enforcement directly in Dubai without the benefit of a streamlined process.
Highlights of the MoU
Extends to various executory instruments: The MoU applies to “judgments.” However, it defines the term to include all final judgments, decisions, orders, ratified or recognized arbitral awards, certified memoranda of composition, as well as any other paper that is defined as a judgment or executory instrument by law.
No re-examination of judgments: The MoU makes clear that the court requested to enforce the judgment will not re-examine judgments on their merits.
Framework for reciprocal enforcement: The MoU sets out a clear framework for enforcement, either by direct application or deputization.
Enforcement Under the MoU
A party can either enforce a judgment by direct application or deputization.
Enforcement of ADGM Courts Judgments in Onshore Dubai
As a first step, parties must apply to the ADGM Courts for a certified copy of the judgment, enclosing an Arabic translation. The ADGM Courts will then affix an executory formula on the judgment. For the direct application procedure, the judgment creditor must apply directly to the onshore Dubai Courts’ enforcement division, submitting a certified copy of the judgment translated into Arabic and affixed with the executory formula.
If seeking enforcement through deputization, the judgment creditor must first file an application. The ADGM Courts enforcement judge will then deputize an enforcement judge of the onshore Dubai Courts to enforce the judgment by providing the court with a letter enclosing, among other materials, an order indicating the enforcement measures or actions to be taken.
Enforcement of Dubai Courts Judgments in the ADGM
A similar process applies to enforcing onshore Dubai Courts judgments in the ADGM, save that such judgments must be translated from Arabic into English.
Conclusion
The process outlined in the MoU seeks to align judicial processes across the UAE. It signals a commitment to enhancing justice, transparency, and efficiency within the UAE’s diverse legal systems, while also aiming to integrate the nation’s common law and civil law courts.
Chady Deeb also contributed to this article.
Two New Procedural Wrinkles That May Disincentivize Challenges to Federal Policies
The first weeks of the Trump Administration have been defined by executive orders and new policies that were immediately challenged on constitutional or statutory grounds.
Recently, the US Environmental Protection Agency indicated its intent to “launch” the “biggest deregulatory action in U.S. History” under which it will undertake 33 separate actions impacting regulations ranging from emissions limits for power plants to internal calculations for the “social cost of carbon.” Even preceding this effort, more than 100 legal challenges to other Trump Administration actions have been filed.
As these disputes move through the litigation process (including appeals and, for at least some cases, likely US Supreme Court review), district courts have issued numerous preliminary injunctions to pause or delay the effects of executive orders until litigation is complete. While some of the new efforts will be challenged in appellate courts due to venue provisions in statutes including the Clean Air Act or Clean Water Act, other challenges will proceed in district courts.
Litigating these challenges can be expensive for both sides, but two recent developments could make litigation costs — particularly in challenges lodged in district courts — higher for challengers. First, the Trump Administration issued a Memorandum titled “Ensuring the Enforcement of Federal Rule of Civil Procedure 65(c),” and subsequently a related Executive Order on the same subject, seeking to require challengers to post bond before seeking preliminary injunctions. Second, the Supreme Court recently decided Lackey v. Stinnie, which — separate and apart from the Memorandum — makes it harder for some challengers to recover attorneys’ fees after a preliminary injunction is granted.
Below, we discuss these developments and how they might apply in the litigation context.
How to Challenge Executive Branch Actions
We have outlined some of the Trump Administration’s initial actions: initial Executive Orders; initial environmental policies; initial efforts to pause government grants; and policies in the energy space. We have also addressed the new Administration’s trade policies here and here.
Individuals and entities generally initiate a challenge to the legal basis for an executive order or other action by filing a complaint in a federal district court. Depending on what is at stake and whether the facts of the case require rapid resolution, the court may use briefings, hearings, or a trial to evaluate whether the order or action should be upheld, struck down, or modified. Parties that lose in district courts may appeal, and some disputes make their way to the Supreme Court, which has the final say on most constitutional issues.
Often, challengers ask for injunctive relief, which is a legal remedy in the form of a court order compelling a party to do, or not do, a particular thing. Injunctive relief is warranted when an award of a money judgment would be insufficient to resolve the harm. Injunctive relief can be temporary — a “preliminary injunction” — or permanent, requiring a party in perpetuity not to do a particular thing.
Courts will often use preliminary injunctions to temporarily preserve the “status quo” while litigation is ongoing. This means that a challenger may win a preliminary injunction, but ultimately lose the case (or have the case mooted if the government changes course on its own before a final judgment).
The White House Memorandum on Fed. R. Civ. P. 65(c)
On March 6, after district courts had issued numerous restraining orders and preliminary injunctions temporarily delaying or reversing executive orders, the Trump Administration issued a new memorandum titled “Ensuring the Enforcement of Federal Rule of Civil Procedure 65(c),” seeking to require plaintiffs to post a bond before requesting preliminary relief. (The White House fact sheet on the Memorandum is here.)
The memo asserts that the slate of lawsuits and preliminary injunctions constitutes an “anti-democratic takeover … orchestrated by forum shopping organizations that repeatedly bring meritless suits … without any repercussions when they fail.” The memo argues that taxpayers are harmed when program cuts are enjoined and substantial government resources are spent “fighting frivolous suits instead of defending public safety.”
In response to the issues it identifies, the memo invokes Federal Rule of Civil Procedure 65(c), which requires parties seeking a preliminary injunction to post security in an amount the court determines is sufficient to cover the costs and damages of the enjoined party if the enjoined party ultimately wins the case on the merits. The memo directs all federal department and agency heads to formally request security under Rule 65(c) in every case where plaintiffs seek a preliminary injunction against the government. It requires that the requests remind the court that Rule 65(c) is mandatory, reiterate that the government’s requested bond amount is “based on a reasoned assessment,” and demand that any party failing to comply with Rule 65(c) should lead to the “denial or dissolution of the requested injunctive relief.”
But despite its strong language, the memo is largely just a reminder of an already existing procedural rule. Judges have discretion to determine the appropriate amount for any Rule 65(c) bond, and, in the context of challenges to executive actions, many courts have determined that amount is zero. Federal judges are presumably aware of Rule 65(c), and many of the judges enjoining the Trump Administration already determined that Rule 65(c) did not require a bond in those cases. Two weeks before the memo, a federal district judge in Maryland granted a college diversity officer’s request for a preliminary injunction against executive orders cancelling diversity, equity, and inclusion (DEI) grants and contracts, but set the Rule 65(c) bond at $0 because the plaintiff’s constitutional rights were at issue and “a bond of the size Defendants appear to seek would essentially forestall Plaintiffs’ access to judicial review.”
Going forward, Rule 65(c) bonds will likely become a more actively contested issue and challengers to any executive action will need to provide arguments why they should not be required to pay.
Lackey v. Stinnie and Plaintiffs’ Attorney Fees
Separately but relatedly, the challengers who have successfully obtained preliminary injunctions blocking Trump Administration executive actions may have a harder time recovering their attorneys’ fees — after the recent Supreme Court decision in Lackey v. Stinnie, plaintiffs will need to see their cases through to final judgment before recovering legal fees.
42 U.S.C. § 1988 provides that civil rights plaintiffs may win reimbursement of their attorneys’ fees if they are the “prevailing party.” Historically, this fee-shifting mechanism has helped advocacy groups and law firms shoulder the substantial cost of civil rights lawsuits. For example the Lackey plaintiffs estimated that the federal appellate litigation in the case cost $800,000. In a procedurally similar case, the New York Civil Liberties Union was seeking $200,000 in attorneys’ fees against two upstate New York counties.
The Supreme Court has addressed when exactly a plaintiff becomes a “prevailing party” (and thus eligible for reimbursement) on several occasions. In Buckhannon Board and Care Home v. West Virginia Department of Health and Human Resources, the Court ruled that a party prevails only when it achieves a “judicially sanctioned changed in the legal relationship of the parties.” 532 U.S. 598, 601 (2001). If a plaintiff files a lawsuit and the defendant voluntarily does what the plaintiff asked for, the plaintiff does not “prevail” for purposes of attorneys’ fees. To prevail, the plaintiff must win a merits judgment from a court.
What if a plaintiff wins a preliminary injunction but loses a final merits judgment? That plaintiff also does not prevail, the Supreme Court has held, because the victory was only temporary, not enduring. Sole v. Wyner, 551 U.S. 74, 86 (2007). The Sole decision left open what happens when a plaintiff wins a preliminary injunction and then the defendant voluntarily provides the relief plaintiff was seeking.
That issue has now been resolved. Until last month, 11 federal appeals courts held that a plaintiff that wins a preliminary injunction can be a “prevailing party” under some circumstances. Not so, said the Supreme Court in Lackey. The Court held that a plaintiff “prevails” when it wins permanent, on-the-merits judicial relief that materially alters the legal relationship of the parties. A plaintiff that wins only a preliminary injunction, which would include several plaintiffs suing the Trump Administration at this juncture, is not yet entitled to reimbursement of its attorneys’ fees. As a result, it’s not yet clear whether plaintiffs challenging the Trump Administration’s policies will receive attorneys’ fees. It will depend on how they are ultimately resolved.
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Two New Procedural Wrinkles That May Disincentivize Challenges to New Federal Policies
The first weeks of the Trump Administration have been defined by executive orders and new policies that were immediately challenged on constitutional or statutory grounds.
Recently, the US Environmental Protection Agency indicated its intent to “launch” the “biggest deregulatory action in U.S. History” under which it will undertake 33 separate actions impacting regulations ranging from emissions limits for power plants to internal calculations for the “social cost of carbon.” Even preceding this effort, more than 100 legal challenges to other Trump Administration actions have been filed.
As these disputes move through the litigation process (including appeals and, for at least some cases, likely US Supreme Court review), district courts have issued numerous preliminary injunctions to pause or delay the effects of executive orders until litigation is complete. While some of the new efforts will be challenged in appellate courts due to venue provisions in statutes including the Clean Air Act or Clean Water Act, other challenges will proceed in district courts.
Litigating these challenges can be expensive for both sides, but two recent developments could make litigation costs — particularly in challenges lodged in district courts — higher for challengers. First, the Trump Administration issued a Memorandum titled “Ensuring the Enforcement of Federal Rule of Civil Procedure 65(c),” and subsequently a related Executive Order on the same subject, seeking to require challengers to post bond before seeking preliminary injunctions. Second, the Supreme Court recently decided Lackey v. Stinnie, which — separate and apart from the Memorandum — makes it harder for some challengers to recover attorneys’ fees after a preliminary injunction is granted.
Below, we discuss these developments and how they might apply in the litigation context.
How to Challenge Executive Branch Actions
We have outlined some of the Trump Administration’s initial actions: initial Executive Orders; initial environmental policies; initial efforts to pause government grants; and policies in the energy space. We have also addressed the new Administration’s trade policies here and here.
Individuals and entities generally initiate a challenge to the legal basis for an executive order or other action by filing a complaint in a federal district court. Depending on what is at stake and whether the facts of the case require rapid resolution, the court may use briefings, hearings, or a trial to evaluate whether the order or action should be upheld, struck down, or modified. Parties that lose in district courts may appeal, and some disputes make their way to the Supreme Court, which has the final say on most constitutional issues.
Often, challengers ask for injunctive relief, which is a legal remedy in the form of a court order compelling a party to do, or not do, a particular thing. Injunctive relief is warranted when an award of a money judgment would be insufficient to resolve the harm. Injunctive relief can be temporary — a “preliminary injunction” — or permanent, requiring a party in perpetuity not to do a particular thing.
Courts will often use preliminary injunctions to temporarily preserve the “status quo” while litigation is ongoing. This means that a challenger may win a preliminary injunction, but ultimately lose the case (or have the case mooted if the government changes course on its own before a final judgment).
The White House Memorandum on Fed. R. Civ. P. 65(c)
On March 6, after district courts had issued numerous restraining orders and preliminary injunctions temporarily delaying or reversing executive orders, the Trump Administration issued a new memorandum titled “Ensuring the Enforcement of Federal Rule of Civil Procedure 65(c),” seeking to require plaintiffs to post a bond before requesting preliminary relief. (The White House fact sheet on the Memorandum is here.)
The memo asserts that the slate of lawsuits and preliminary injunctions constitutes an “anti-democratic takeover … orchestrated by forum shopping organizations that repeatedly bring meritless suits … without any repercussions when they fail.” The memo argues that taxpayers are harmed when program cuts are enjoined and substantial government resources are spent “fighting frivolous suits instead of defending public safety.”
In response to the issues it identifies, the memo invokes Federal Rule of Civil Procedure 65(c), which requires parties seeking a preliminary injunction to post security in an amount the court determines is sufficient to cover the costs and damages of the enjoined party if the enjoined party ultimately wins the case on the merits. The memo directs all federal department and agency heads to formally request security under Rule 65(c) in every case where plaintiffs seek a preliminary injunction against the government. It requires that the requests remind the court that Rule 65(c) is mandatory, reiterate that the government’s requested bond amount is “based on a reasoned assessment,” and demand that any party failing to comply with Rule 65(c) should lead to the “denial or dissolution of the requested injunctive relief.”
But despite its strong language, the memo is largely just a reminder of an already existing procedural rule. Judges have discretion to determine the appropriate amount for any Rule 65(c) bond, and, in the context of challenges to executive actions, many courts have determined that amount is zero. Federal judges are presumably aware of Rule 65(c), and many of the judges enjoining the Trump Administration already determined that Rule 65(c) did not require a bond in those cases. Two weeks before the memo, a federal district judge in Maryland granted a college diversity officer’s request for a preliminary injunction against executive orders cancelling diversity, equity, and inclusion (DEI) grants and contracts, but set the Rule 65(c) bond at $0 because the plaintiff’s constitutional rights were at issue and “a bond of the size Defendants appear to seek would essentially forestall Plaintiffs’ access to judicial review.”
Going forward, Rule 65(c) bonds will likely become a more actively contested issue and challengers to any executive action will need to provide arguments why they should not be required to pay.
Lackey v. Stinnie and Plaintiffs’ Attorney Fees
Separately but relatedly, the challengers who have successfully obtained preliminary injunctions blocking Trump Administration executive actions may have a harder time recovering their attorneys’ fees — after the recent Supreme Court decision in Lackey v. Stinnie, plaintiffs will need to see their cases through to final judgment before recovering legal fees.
42 U.S.C. § 1988 provides that civil rights plaintiffs may win reimbursement of their attorneys’ fees if they are the “prevailing party.” Historically, this fee-shifting mechanism has helped advocacy groups and law firms shoulder the substantial cost of civil rights lawsuits. For example the Lackey plaintiffs estimated that the federal appellate litigation in the case cost $800,000. In a procedurally similar case, the New York Civil Liberties Union was seeking $200,000 in attorneys’ fees against two upstate New York counties.
The Supreme Court has addressed when exactly a plaintiff becomes a “prevailing party” (and thus eligible for reimbursement) on several occasions. In Buckhannon Board and Care Home v. West Virginia Department of Health and Human Resources, the Court ruled that a party prevails only when it achieves a “judicially sanctioned changed in the legal relationship of the parties.” 532 U.S. 598, 601 (2001). If a plaintiff files a lawsuit and the defendant voluntarily does what the plaintiff asked for, the plaintiff does not “prevail” for purposes of attorneys’ fees. To prevail, the plaintiff must win a merits judgment from a court.
What if a plaintiff wins a preliminary injunction but loses a final merits judgment? That plaintiff also does not prevail, the Supreme Court has held, because the victory was only temporary, not enduring. Sole v. Wyner, 551 U.S. 74, 86 (2007). The Sole decision left open what happens when a plaintiff wins a preliminary injunction and then the defendant voluntarily provides the relief plaintiff was seeking.
That issue has now been resolved. Until last month, 11 federal appeals courts held that a plaintiff that wins a preliminary injunction can be a “prevailing party” under some circumstances. Not so, said the Supreme Court in Lackey. The Court held that a plaintiff “prevails” when it wins permanent, on-the-merits judicial relief that materially alters the legal relationship of the parties. A plaintiff that wins only a preliminary injunction, which would include several plaintiffs suing the Trump Administration at this juncture, is not yet entitled to reimbursement of its attorneys’ fees. As a result, it’s not yet clear whether plaintiffs challenging the Trump Administration’s policies will receive attorneys’ fees. It will depend on how they are ultimately resolved.
Interesting Delay: Prejudgment Interest Accrues Despite Unreasonable Delay
The US Court of Appeals for the Federal Circuit upheld a decision on enhanced damages and prejudgment interest, concluding that the district court correctly applied the appropriate standard for enhanced damages in accordance with established precedent. Halo Electronics, Inc. v. Pulse Electronics, Inc., Case Nos. 23-1772; -1966 (Fed. Cir. Feb. 28, 2025) (Prost, Bryson, Reyna, JJ.) (nonprecedential).
In 2013, following a jury verdict in favor of Halo, the district court entered a $1.5 million verdict against Pulse for willful infringement but denied Halo enhanced damages. Halo appealed and, in 2016, engendered a new enhanced damages standard from the Supreme Court. In 2015, while the case was pending before the Supreme Court, Halo filed for an award of supplemental damages for direct infringement between 2012 and 2013, and prejudgment and post-judgment interest on the initial $1.5 million judgment and on the supplemental damages. The district court awarded supplemental damages and prejudgment and post-judgment interest.
In 2017, the district court determined that Halo was not entitled to enhanced damages or attorneys’ fees under the Supreme Court’s new standard. Although the parties still disagreed on which method to use for prejudgment interest calculation – and briefed their positions accordingly – the district court mistakenly ordered the clerk to enter a final judgment and close the case. After the Supreme Court decided WesternGeco v. ION Geophysical in 2018, Halo (in 2020) filed a motion seeking prejudgment interest and a new damages trial, arguing that the district court had not made a final ruling on the issue of prejudgment interest and that WesternGeco was intervening case law that permitted it to seek additional damages for Pulse’s activities outside the United States.
Halo argued that because the final order closing the case ignored an outstanding issue (prejudgment interest), the case was merely administratively closed. Although Pulse argued that the resurrected case should remain closed under Federal Rule of Civil Procedure 41(b), the district court awarded limited prejudgment interest in March 2023. The district court rejected Halo’s request for a new trial regarding additional foreign damages under WesternGeco.
Halo appealed, and Pulse counter appealed. Halo raised two main arguments:
Enhanced damages were appropriate because of the jury’s finding of willfulness.
The district court should have allowed a limited trial on the issue of foreign infringement.
Pulse argued that FRCP 41(b) should have barred any prejudgment interest because Halo did not address the court’s oversight until 2020.
The Federal Circuit rejected both of Halo’s arguments. It explained that a jury’s finding of willfulness is “but one factor” in an enhanced damages determination under the Supreme Court’s highly discretionary Halo test. Willful infringement does not require the more egregious intent that gives rise to enhanced damages, nor does it merge with enhanced damages analyses procedurally – willfulness is a jury issue, while enhanced damages is an issue for the court.
Addressing Pulse’s argument, the Federal Circuit found no abuse of discretion in either the district court’s refusal of a new trial or its decision to allow prejudgment interest. It was unreasonable for Halo to bring forward an argument under WesternGeco for a new trial two years after WesternGeco was decided. Waiting three years between the case’s 2017 closing and renewing its arguments about prejudgment interest also constituted unreasonable delay, but other equitable factors nevertheless permitted the award of prejudgment interest.
Federal Judge Clarifies Scope of Preliminary Injunction Enjoining President Trump’s DEI-Related Executive Orders
On March 10, 2025, a federal judge in Maryland clarified the scope of the nationwide preliminary injunction that enjoins key portions of two of President Donald Trump’s diversity, equity, and inclusion (DEI)–related executive orders (EOs), stating that the injunction applies to all federal agencies.
Quick Hits
On February 21, 2025, a federal judge granted a nationwide preliminary injunction that enjoined key provisions of President Trump’s executive orders aimed at “illegal” DEI initiatives.
On March 3, 2025, the judge refused to halt the preliminary injunction, pending the government’s appeal to the Fourth Circuit Court of Appeals.
On March 10, 2025, the judge clarified that the preliminary injunction applies to all federal executive branch agencies, departments, and commissions, not just those that were specifically named in the complaint.
U.S. District Judge Adam B. Abelson clarified that the nationwide preliminary injunction enjoining the termination, certification, and enforcement provisions of EO 14151 and EO 14173 “applies to and binds Defendants other than the President, as well as all other federal executive branch agencies, departments, and commissions, and their heads, officers, agents, and subdivisions directed pursuant to” those executive orders.
The court’s February 21, 2025, preliminary injunction order defined the “Enjoined Parties” as “Defendants other than the President, and other persons who are in active concert or participation with Defendants.” The plaintiffs filed a motion to clarify the scope of the order. The government argued that the court lacked jurisdiction to rule on the motion, and that only the specific departments, agencies, and commissions named as additional defendants in the complaint were bound by the preliminary injunction. The complaint named the following defendants: the Office of Management and Budget, the U.S. Departments of Justice, Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, and Transportation, along with the heads of those agencies (in their official capacities), the National Science Foundation, and President Trump in his official capacity. The government argued that including other departments, agencies, and commissions as enjoined parties would be inconsistent with Federal Rule of Civil Procedure 65(d), Article III of the U.S. Constitution’s standing requirement, and traditional principles of equity and preliminary injunctive relief.
The court disagreed. First, according to the court, the plaintiffs have shown a likelihood of success on the merits that the termination, certification, and enforcement provisions are unconstitutional, so any agencies acting pursuant to those provisions “would be acting pursuant to an order that Plaintiffs have shown a strong likelihood of success in establishing is unconstitutional on its face.”
Second, the termination and certification provisions were directed to all agencies, the enforcement provision was directed to the U.S. Department of Justice, and the president was named as a defendant in the complaint; thus, the preliminary injunction (in both its original and clarified forms) “is tailored to the executive branch agencies, departments and commissions that were directed, and have acted or may act, pursuant to the President’s directives in the Challenged Provisions of” EO 14151 and EO 14173.
Third, only enjoining those agencies that were specifically named in the complaint, despite the fact that the president was named as a defendant, would provide incomplete relief to the plaintiffs because their speech is at risk of being chilled by non-named agencies as well. In addition, the court held that “[a]rtificially limiting the preliminary injunction in the way Defendants propose also would make the termination status of a federal grant, or the requirement to certify compliance by a federal contractor, turn on which federal executive agency the grantee or contractor relies on for current or future federal funding—even though the agencies would be acting pursuant to the exact same Challenged Provisions,” resulting in “‘inequitable treatment.’” Thus, the court granted the plaintiffs’ motion to clarify that the preliminary injunction applies to every agency in the executive branch.
Second Circuit: Rule 37 Sanctions Require ‘Intent to Deprive’ for Lost ESI, Not Mere Negligence
Plaintiff–Appellant Richard Hoffer sued the city of Yonkers, the Yonkers Police Department, and various individual police officers under 42 U.S.C. § 1983, alleging the officers used excessive force when arresting him. After trial, the jury returned a verdict in the officers’ favor. Hoffer appealed the judgment, arguing the district court erred in denying his request for an adverse inference instruction pursuant to Federal Rule of Civil Procedure 37(e)(2), based on a missing video of him being tased. On appeal, the parties disputed the standard applicable to requests for adverse inference instructions under Rule 37(e)(2).
The Second Circuit held that to impose sanctions pursuant to Rule 37(e)(2), a district court or a jury must find, by a preponderance of the evidence, that a party acted with an “intent to deprive” another party of the lost information. Consistent with this holding, the court further held the lesser “culpable state of mind” standard, which includes negligence,[1] was no longer applicable for imposing Rule 37(e)(2) sanctions for lost electronically stored information (ESI).
Hoffer v. City of Yonkers, et al. Background
Plaintiff–appellant commenced a § 1983 suit against the city of Yonkers, the Yonkers Police Department, and various individual police officers alleging, among other things, that the officers used excessive force during his 2016 arrest. A trial was held in 2021 on the claims against the individual police officers (collectively, the officer defendants), where differing accounts of the arrest were offered into evidence. There was no dispute that plaintiff was tased two times. However, each taser generates a log, which reflects each use of the taser. And while the log for the date in issue reflected two deployments, they were hours apart: the first at 4:16 p.m., when the officer tested the taser at the beginning of his shift, and the second at 8:02 p.m., lasting eight seconds, which the officer testified corresponded to the secondtime he tased plaintiff. The log also reflected an event at 10:24 p.m. titled “USB Connected,” that apparently corresponded to the taser syncing to an external device.
There was also testimony that each taser deployment generates a video. However, the testimony established that only video of the second deployment was available because the video of the first deployment “had somehow been overwritten.” No further explanation was provided as to the first video’s absence. Plaintiff’s girlfriend testified that, when she was at the police station after plaintiff’s arrest, she saw one officer holding a USB and saying to another officer: “It shows everything that we did and nothing that he did.”
Plaintiff’s counsel orally requested the district court instruct the jury that it could draw an adverse inference against the officer defendants based on the purported spoliation of the first video. At the charge conference, the district court, after assessing the request under Rule 37(e)(2), declined finding the evidence before it insufficient to establish any defendant “acted with an intent to deprive [Plaintiff] of the use of the video.”
There was no “clear evidence” that the first taser video existed in the first place, speculating that perhaps the first deployment did not trigger a video recording or that the first and second taser deployments happened within the same eight second period the log captured. The court further reasoned that it was not clear what the officer meant when he testified about “something being overwritten,” and nothing in his testimony suggested he had any direct knowledge or experience with the document management system for taser videos or this video specifically. The district court further observed that officer testimony establishing there were two taser deployments and no effort by defendants to “cover up that fact” undercut the theory the video was purposely destroyed. After three days of deliberations, the jury returned a unanimous verdict, finding in the officer defendants’ favor.
Appeal
On appeal, plaintiff-appellant argued that the district court erred by failing to instruct the jury that it could draw an adverse inference based on the purported spoliation of the first taser video. To decide that issue, the court was required to first resolve the parties’ dispute regarding the showing required for an adverse inference instruction under Rule 37(e)(2).[2]
In resolving this issue, the court discussed the history of Rule 37. Specifically, it noted that before 2015, a party seeking an adverse inference instruction based on lost evidence—electronic or otherwise—had to establish that the party obligated to preserve such evidence who failed to do so acted with “a culpable state of mind”[3] (internal quotation marks omitted). At that time, the circuit court held the requirement could be satisfied when a party acted knowingly or negligently. An intentional act was not required to establish a “culpable state of mind.” Then, in 2015, Rule 37(e) was amended to address the measures a court could employ if ESI was wrongfully lost, and the findings required to order such measures. At that time, Rule 37 was split into two subsections. The first allowed a court, upon a finding of prejudice to another party arising from the loss of ESI to order “measures no greater than necessary to cure the prejudice.” The second enumerated certain sanctions the court may impose “only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation.”
The court observed that the Advisory Committee notes to the 2015 Amendment explicitly stated that subdivision (e)(2) rejects cases such as Residential Funding that authorize adverse inference instructions upon a finding of negligence.[4] According to the court, the notes reason that only the intentional loss or destruction of evidence gives rise to an inference that the evidence was unfavorable to the party responsible for that loss or destruction. Negligent—or even grossly negligent—behavior does not logically support that inference.
While plaintiff-appellant correctly noted various circuit decisions after the 2015 Amendment that referenced or used the lesser “culpable state of mind” standard in the context of lost ESI (citing cases), the circuit noted that none of those decisions expressly held that the state of mind required for a sanction under Rule 37(e)(2) could be less than “intent to deprive.” Rather, no decision directly addressed the question before the court: whether the 2015 Amendment abrogated the lesser “culpable state of mind” standard in the context of lost ESI. According to the circuit, “[t]o the extent these decisions implied that a Rule 37(e)(2) sanction could issue upon a finding of a state of mind other than ‘intent to deprive,’ any such implication was mistaken after the 2015 Amendment.”
Conclusion
The Second Circuit has clearly articulated that imposing a sanction under Rule 37(e)(2) requires a finding of “intent to deprive another party of the information’s use in the litigation.” Thus, the 2015 Amendment to Rule 37(e)(2) abrogated the lesser “culpable state of mind” standard used in Residential Funding in the context of lost ESI. “A party’s acting negligently or knowingly will not suffice to justify the sanctions enumerated in Rule 37(e)(2).” Notably, in holding that the requisite state of mind to impose a sanction under Rule 37(e)(2) is “intent to deprive,” the Second Circuit joins the majority of its sister circuits.[5]
[1] see Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 108 (2d Cir. 2002).
[2] The parties also disagreed about whether the requirements of Rule 37(e)(2) must be proven by clear and convincing evidence or by a preponderance of the evidence, and whether the district court erred in resolving factual questions itself, rather than submitting them to the jury. Although the appellate court determined these issues (i.e., by a preponderance of the evidence and there was no error), these issues are not discussed in this blog.
[3] See Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002).
[4] Before the 2015 Amendment, Rule 37(e) provided in full: “Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.” Rule 37(e)(2) advisory committee’s note to 2015 amendment.
[5] See Jones v. Riot Hosp. Grp. LLC, 95 F.4th 730, 735 (9th Cir. 2024); Ford v. Anderson Cnty., Texas, 102 F.4th 292, 323–24 (5th Cir. 2024); Skanska USA Civ. Se. Inc. v. Bagelheads, Inc., 75 F.4th 1290, 1312 (11th Cir. 2023) (specifying that “intent to deprive” means “more than mere negligence”); Wall v. Rasnick, 42 F.4th 214, 222–23 (4th Cir. 2022); Auer v. City of Minot, 896 F.3d 854, 858 (8th Cir. 2018); Applebaum v. Target Corp., 831 F.3d 740, 745 (6th Cir. 2016) (“A showing of negligence or even gross negligence will not do the trick.”).
Federal Appeals Court Rules Against Doctor Seeking to Use Mushrooms to Aide Terminal Patients: How We Learned to Question the Rationale of the Controlled Substances Act
It’s funny how things work out – sometimes you find yourself living in a sort of butterfly effect where the tail seems to wag the dog. In 2023, when we first started writing about the traction psychedelics were gaining as medicine, our goal was not to end up spending years covering the winding legal battle of a Washington physician to legally obtain psilocybin for terminally ill cancer patients to manage their pain.
But here we are. To be clear, while we’re certainly interested in the fate of Dr. Sunil Aggarwal’s efforts, we’ve been following the case closely because it’s one of a few legal cases to shed light onto what courts and federal agencies may do when faced with a medicinal demand for psychedelics outside of the research context.
In his efforts to be able to administer psilocybin to his patients, Aggarwal employed a two-fold approach: (1) he attacked the status of psilocybin as a Schedule I drug, and (2) he tried to get around statutory requirements governing a physician’s right to distribute Schedule I drugs outside of the research context. Neither has been successful (yet).
DEA Says No to Rescheduling, but the Court Keeps the Door Cracked
As a reminder, here’s what happened when Aggarwal petitioned the DEA to reschedule psilocybin:
Since at least 2021, Dr. Sunil Aggarwal has been working to legally obtain psilocybin for terminally ill cancer patients undergoing end-of-life care. Because psilocybin is a Schedule I drug under the Controlled Substance Act (CSA), obtaining the drug to treat his patients was “practically and legally difficult” according to his lawyers. Aggarwal turned to the DEA, petitioning the agency to transfer psilocybin from Schedule I to Schedule II. The DEA denied the petition in a four-sentence letter. Aggarwal then looked to the Ninth Circuit.
The Ninth Circuit Court of Appeals in Aggarwal v. U.S. DEA directed the U.S. Drug Enforcement Agency (DEA) to reconsider its decision not to transfer psilocybin from Schedule I to Schedule II.
The Ninth Circuit sided with Aggarwal. The court held that the “DEA failed to provide sufficient analysis to allow its path to be reasonably discerned” and “failed to clearly indicate that it ha[d] considered the potential problem identified in the petition.” More specifically, the Ninth Circuit noted that the DEA failed to define “currently accepted medical use with severe restrictions,” which was the applicable standard for rescheduling on which Aggarwal relied. The court directed the DEA to clarify or reevaluate its position.
And, while the footsteps may not have been as swift as some would hope, we still stand by the predictions we made in 2023:
The Ninth Circuit’s refusal to accept the DEA’s out-of-hand dismissal of a petition to reschedule psilocybin is yet another step in what appears to be faster and faster footsteps towards the future. What that future holds is yet to be determined – though we will monitor closely – but whatever the future is it promises to be quite a ride.
Will the Right to Try Act Save Practitioners Who Don’t Conduct Research but Want to Administer Schedule I Drugs?
Perhaps realizing that convincing the DEA to reschedule psilocybin may be a tall task, Aggarwal tried his hand before the DEA and then the Ninth Circuit with another approach — trying to get around the Controlled Substance Act (CSA) by way of the Right to Try Act (RTT Act). Aggarwal challenged the DEA’s decision not to exempt him from registration under the CSA, but the FDA’s RTT Act didn’t turn out to be the rescuer he had hoped for.
Because it’s a Schedule I substance, the CSA dictates that psilocybin may only be produced, dispensed, or possessed in the context of a research protocol registered with the DEA and approved by the Secretary of Health and Human Services. In other words, psilocybin may only be dispensed by medical practitioners in the context of “bona fide research,” which requires the approval of the FDA (see21 U.S.C. § 823(g)(2)(A)). The DEA handles registration and “may, by regulation, waive the requirement for registration of certain…distributors, or dispensers if DEA finds it consistent with the public health and safety” (21 U.S.C. § 8222(d)).
The Food, Drug, and Cosmetic Act (FDCA) is even broader and “imposes restrictions on the…distribution of all drugs including but not limited to controlled substances” (21 U.S.C. § 331). Generally, before a new drug can be introduced to the market, it must go through the clinical trial process, but there are other ways. A patient, for instance, may attempt to access a new drug through the FDA’s expanded access program.
Where a prescription drug is a controlled substance, “the FDCA and CSA operate in tandem” and the person distributing the drug must comply with both statutes.
The FDA has also adopted the RTT Act, which is intended to expand access for eligible investigational drugs outside the clinical trail process. “The RTT Act exempts the drugs provided to eligible patients from specified statutory and regulatory requirements concerning drug labeling, marketing, clinical, testing and approval.” “To access an eligible investigational drug under the RTT Act,” an eligible patient’s physician applies directly to the drug’s sponsor, and the FDA is not involved in approving access.
Seeking psilocybin for his terminally ill patients, Aggarwal’s attorneys submitted a letter to the DEA asking the DEA “for authorization to access psilocybin for therapeutic use under state and federal RTT Acts and immunity from prosecution under the CSA.” His lawyers also asked that if it deemed registration was required under the CSA, that the registration requirement be waived.
The DEA said no dice and clung tight to the CSA. In so doing, the DEA made a few things clear:
“Practitioners who seek to dispense or possess [S]chedule I controlled substances must be properly registered as an approved researcher in accordance with the CSA and its implementing regulations.”
The RTT Act does “not provide any exemptions from the CSA or its implementing regulations.”
The RTT Act does “not give the DEA authority to waive CSA requirements.”
Doubling down, the DEA also declined Aggarwal’s request to initiate rulemaking to exempt him from the CSA’s registration requirement. The DEA provided the following as its reasoning:
The DEA could not fully assess Aggarwal’s proposal because it was lacking in detail.
Aggarwal’s desire to administer psilocybin to patients was not consistent with public health and safety. In making this particular finding, the DEA relied heavily on Congress’ determinations in designating psilocybin as a Schedule I drug that it has a high potential for abuse, no currently accepted medicinal use in treatment in the United States, and a lack of accepted safety for use under medical supervision.
Aggarwal’s cited historical scenarios involving Schedule I controlled substances — including marijuana — were not persuasive.
The Ninth Circuit found in favor of the DEA, ruling that the DEA’s reasoning in blocking Aggarwal’s access to the DEA was not arbitrary and capricious. While the Ninth Circuit didn’t declare the following reasoning the rule of land even within the Ninth Circuit, it did make clear that the DEA’s reliance on this reasoning is not arbitrary and capricious:
“The CSA and FDCA together govern access to controlled substances for medicinal purpose.”
“Although the RTT Act itself does not require FDA approval for eligible patients to access eligible investigational drugs, it does not exempt such drugs from the FDA’s Attorney-General-delegated oversight pursuant to the CSA.” “So DEA’s continued enforcement of the CSA’s registration requirement does not affect, modify, repeal, or supersede the FDCA as amended by the RTT Act.”
The Ninth Circuit did not reject the DEA’s reliance on Congress’ determination, as codified in the CSA, that psilocybin has a high potential for abuse, no currently accepted medicinal use in treatment in the United States, and a lack of accepted safety for use under medical supervision.
So, What Does an Opinion Brushing Back One Physician on the West Coast Mean to the Psychedelics Industry More Broadly?
Proponents and physicians who are looking for easier access to psilocybin outside of the research context will see this as a significant step back. The DEA dealt a significant setback to the ability to rely on the RTT Act or to seek a waiver of registration. The Ninth Circuit didn’t really pull back the reigns. The DEA’s position that, even if a physician is able to obtain approval under the RTT, he or she still must obtain registration or a waiver under the CSA has now been approved (or at least not disapproved). And that position was pretty clear: The DEA is still in charge.
So, what does the opinion not mean? This opinion does not foreclose the efforts of physicians interested in conducting research blessed by the CSA and FDA. As we’ve previously reported, interest in researching psychedelics remains high and it appears capital does, too. Indeed, there are strong pushes for research in the federal, state, and private sectors with corresponding funding. There is no indication — and we have no expectation — that it will slow down any time soon, and the Ninth Circuit’s decision does nothing to change our thoughts on that point. Indeed, it appears to be, at least according to the DEA as approved by the Ninth Circuit, the clearest path forward.
EU Advocate General Recommends Overturning Decision Annulling Harmonized Classification and Labeling of Titanium Dioxide
On February 6, 2025, the European Union (EU) Advocate General (EU AG) recommended that the European Court of Justice (ECJ) overturn the 2022 decision of the General Court annulling the 2019 harmonized classification and labeling of titanium dioxide as a carcinogenic substance by inhalation in certain powder forms. As reported in our December 6, 2022, memorandum, the court annulled the European Commission’s (EC) decision to classify titanium dioxide as a suspected human carcinogen. The French government and the EC appealed the decision, arguing that the court exceeded the limits of permissible judicial review of an EC decision and that the court incorrectly interpreted the concept of “intrinsic properties” as it appears in the Classification, Labeling, and Packaging (CLP) Regulation.
According to the EU AG, “[i]n cases of scientific uncertainty relevant for the identification and classification of hazardous substances, the CLP Regulation bestows the role of final interpreter on the Commission, which in turn renders its decision on the basis of an assessment by the [Risk Assessment Committee (RAC)]. In other words, the Commission chooses the ‘correct’ interpretation of scientific data.” In the judgment under appeal, the court did not agree with the conclusion of the European Chemicals Agency’s (ECHA) RAC. The court “explained that taking into consideration the standard particle density value of titanium dioxide for the purposes of the Morrow overload calculation would be wrong; a lower density value should have been used in the circumstances at issue.” The EU AG concludes that “by going further than simply judging whether the administration was aware of and had assessed all of the aspects that current scientific knowledge required it to take into consideration,” the court exceeded the limit of its power of judicial review and annulled the EC’s decision “not because that institution did not take into account all of the relevant (scientific) factors, but because it disagreed with how the administration had assessed those factors.”
The lower court excluded the possibility that the carcinogenicity arising from the inhalation of titanium dioxide in powder form may be connected to its intrinsic properties because (1) carcinogenicity appears only if a certain quantity of that substance is inhaled and (2) carcinogenicity results only from inflammation in the lung due to the accumulation of titanium dioxide particles therein. The court concluded that these are properties that are extrinsic to the substance itself. The EU AG disagrees, stating that “in the light of the context and purpose of the CLP Regulation, the concept of ‘intrinsic properties’ must be interpreted broadly” and that the court “erred when attributing a narrow interpretation to the concept of ‘intrinsic properties.’”
The EU AG proposes that the ECJ:
Set aside the November 2022 judgment in CWS Powder Coatings and Others v Commission (T‑279/20, T‑283/20 and T‑288/20, EU:T:2022:725);
Refer the case back to the General Court for the resolution of the remaining pleas in law; and
Order that the costs be reserved.
EU AGs assist the ECJ. They are responsible for presenting, with complete impartiality and independence, opinions in assigned cases. Their opinions are non-binding. The ECJ is expected to issue its decision later this year.
Time Was Not on Her Side: 5th Circuit Rules Unpaid Mentor’s Claim of Discrimination Is Untimely
In Title VII actions, plaintiffs have a limited amount of time to file a charge of discrimination (or a court can dismiss the case as untimely). In the case of Wells v. Texas Tech University, the timeliness dynamic was further complicated by a question of whether unpaid participation in a program can make you an employee. The Fifth Circuit took a hard look at both and determined that the plaintiff’s claim was too late.
(Paid) Life in the Lab and Unpaid Mentoring
Cara Wells was a research assistant back in 2009 in the Animal and Food Sciences Lab at Texas Tech University. In that position, Wells claimed that two professors bullied and harassed her, including forcing her to share a hotel room with a male professor during certain conferences. After she graduated and started her PhD program, she continued to work in that lab. She graduated from her doctoral program in 2017 but stayed at the lab as an assistant. She then went on to participate in Texas Tech’s Accelerator Hub program and founded two companies, using one of her former professors as a mentor. There were some professional issues between Wells and the professor, and in 2020, Wells ultimately reported to the Texas Tech the harassment she claimed she suffered during her student days.
In May 2022 (about two years after her harassment report), Wells joined Texas Tech’s Hub program as an unpaid mentor. Texas Tech removed her from that program about a month later, removed her from the website, and took her off any publications. In November 2022, Wells filed an EEOC charge alleging sex discrimination, sex harassment, and retaliation. She claimed the harassment started in 2012 when she was an undergrad research assistant and continued through 2022 when she was removed as a Hub mentor. She later filed suit against Texas Tech for the same claims.
Employee Status and Timeliness
Texas Tech moved to dismiss Wells’ claims as untimely. Title VII requires that a charging party file an EEOC charge within 180 days of the unlawful employment action. The lower court determined that Wells’ last employment with Texas Tech was in 2017 (while she was a doctoral student), so her November 2022 charge was far outside the required time period. Wells argued that her participation in the unpaid Hub mentor program in 2022 gave her employee status.
The Fifth Circuit used the “direct-renumeration” test to determine whether Wells was an employee for the purpose of Title VII. The test requires that an individual receive either wages or job-related benefits to be considered in an employment relationship. As an unpaid mentor, the court decided that Wells received neither and therefore was not an employee after 2017. The court found that her claims were untimely.
Wells also argued that even if her employment with Texas Tech ended in 2017, she reported the harassment in 2020 and was retaliated against in May 2022 — so her November 2022 charge of discrimination was timely. The court did not agree and stated that while former employees had the ability to file retaliation claims, the system was not set up “to permit a perpetual cause of action for any unfavorable action taken in the future.” Courts should look to see if the time passing between the protected activity and the adverse employment action is too “attenuated” to support a claim for retaliation. In this case, the court held that the two years between her reporting the harassment and her subsequent removal from the mentor program was too long to establish a causal connection.
What Can We Learn from This?
As with most employment issues, documentation is key. When trying to establish a timeline of when things occurred, having memos in the file and completed forms with dates makes a big difference. An employer who can definitely show when a complaint was filed may be able to use it to further a timeliness defense.
The court’s discussion of the plaintiff’s unpaid mentoring status also shows why written job descriptions and payment/benefits statements are helpful. Employers should consistently update the duties and pay (or non-pay) of positions within the company. It is also important to evaluate what sort of benefits are provided to unpaid interns and fellows so you don’t put yourself into an employment relationship without knowing it.