Supreme Court Scrutinizes Nationwide Injunctions and Birthright Citizenship
The U.S. Supreme Court heard oral arguments this week in Trump v. CASA, a case that could limit the ability of lower federal courts to issue nationwide injunctions, within the context of a challenge to a 2025 executive order issued by President Trump that would deny automatic citizenship to children born in the U.S. to undocumented immigrants and individuals with temporary legal status. Lower courts had blocked the policy from taking effect nationwide. The government challenged both the scope of that relief and the underlying interpretation of the Fourteenth Amendment.
Judicial Power Questioned
The Court is now considering whether federal district courts can continue issuing injunctions that halt enforcement of federal policies across the country and beyond the specific plaintiffs of a given case. District courts have relied on nationwide or universal injunctions for at least the last fifty years to suspend executive action in policy realms that include topics such as immigration, vaccine mandates, Title IX, and “Don’t Ask, Don’t Tell.”
Critics of nationwide injunctions argue that they exceed the scope of judicial power granted in Article III of the U.S. Constitution, encourage forum shopping, and force judges to make quick decisions on difficult and high-stakes legal questions. Proponents of nationwide injunctions state that they are often necessary to protect civil liberties, avoid confusion, and prevent proliferation of litigation.
While the Justices’ views on the constitutionality of President Trump’s Executive Order are expected to fall down party lines and appeared discernable from their questions and comments at oral argument, their views on the remedy—nationwide injunctions—are less predictable. During oral argument, the Justices almost universally expressed concerns about the practicality of eliminating nationwide injunctions while still providing litigants with expeditious avenues of relief. Some of the concerns raised by the Justices were: the hurdles of pursuing remedies through a class action, the Solicitor General’s reluctance to commit to abiding by a Court of Appeals’ precedent, and the burden on individual litigants.
The advocates before the Court offered a range of options that the Court might consider in deciding this issue. The United States’s position is that there should be a bright-line rule against nationwide injunctions. The state and city respondents encouraged the Court to reject a bright-line rule barring nationwide injunctions. Instead, New Jersey’s Solicitor General, representing a coalition of states opposing the Executive Order, offered three circumstances in which nationwide injunctions should be available: First, in circumstances in which a nationwide injunction is the only practical or legal workable way to remedy the harm for the parties (i.e. in the context of birthright citizen; Second, where Congress has so authorized; and Third, in cases where alternative forms of nonparty relief are not legally or practically available. The private party respondents alternatively suggested that the Court could limit universal injunctions to cases that challenge the constitutionality of a statute or policy involving fundamental constitutional rights.
Although the Court may sidestep the substantive issue here—how to interpret the Fourteenth Amendment’s Citizenship Clause—the unique challenges of citizenship highlighted the parties arguments on benefits and challenges of nationwide injunctions. For example, the Justices questioned how a patchwork of U.S. citizenship rules could be applied in practice if a nationwide injunction were not available.
Preparing for a Shift in Litigation Strategy
Organizations engaged in multi-state litigation, or that rely on early-stage injunctions to pause new federal rules, may see their options narrowed. A ruling that limits the availability of nationwide injunctions could require more targeted relief and could lead to inconsistent enforcement across jurisdictions.
This is a case to watch for companies, advocacy organizations, and public institutions navigating federal compliance and regulatory uncertainty. Those with exposure to immigration enforcement, benefits eligibility, or federal grant conditions should be particularly attentive to how the Court rules—and what it signals for executive authority going forward.
Next Steps
Given the potential for far-reaching change, it’s important for affected organizations to:
Monitor the Court’s decision, expected by the end of the Term, expected in late June or early July 2025.
Evaluate any reliance on nationwide injunctions in pending or anticipated litigation.
Review internal policies involving citizenship status, particularly where eligibility for services or programs depends on current federal interpretation.
Engaging experienced counsel early in the process can help clarify potential exposure and ensure flexibility in response to a decision that may reset the rules on both litigation remedies and immigration rights.
Ex Professor Accuses Penn State of Reverse Discrimination and Retaliation
Former Penn State writing professor Zack De Piero has filed a lawsuit against the university, alleging reverse discrimination and retaliation following his opposition to social justice and antiracist initiatives on campus.
Background
De Piero, a 40-year-old professor who identifies as white, claimed that his supervisors subjected him to embarrassment, harassment, and discrimination through various social justice and antiracism programs. He specifically objected to workshops and training sessions that required him to acknowledge “white privilege” and identify manifestations of “white supremacy” in culture and writing.
After lodging an internal complaint with the university, De Piero began to challenge the discourse on race during an online training session. Subsequently, other participants in the training filed a complaint against him, accusing him of bullying and harassment. The university’s investigation concluded that no bias or discrimination had been directed at De Piero or similarly situated individuals. However, it found that De Piero had engaged in aggressive and disruptive behavior. He received a written notice advising that his behavior was unacceptable and warning that future similar conduct could result in disciplinary action. His subsequent performance review reflected a decrease in two areas due to his disruptive behavior, although he received high marks for overall performance. Two months after receiving the review and shortly before the new school year began, De Piero resigned, later claiming constructive discharge.
The Suit
The lawsuit, initially filed in June 2023, alleges racial discrimination, a hostile work environment, and retaliation for exercising his First Amendment rights, in violation of the Civil Rights Act Title VII, 42 U.S.C. § 2000; 42 U.S.C. § 1983; 42 U.S.C. § 1981, and Pennsylvania’s Human Relations Act. The university responded with a motion to dismiss, arguing that engaging in uncomfortable discussions about race does not equate to race discrimination.
Ruling
On January 1, 2024, the Court partially granted and partially denied the defendants’ motion to dismiss. The Court reiterated the standards for each count alleged, noting that a claim of disparate treatment under Title VII, Section 1981, and the PHRA requires the plaintiff to demonstrate (1) membership in a protected class; (2) qualification for the position; (3) suffering an adverse employment action; and (4) circumstances suggesting intentional discrimination. The Court determined that the warning issued to De Piero was not disciplinary and that the negative performance rating did not materially alter his job conditions, as his contract was renewed and he received a raise.
On April 16, 2025, the Court dismissed the remainder of the case, granting Penn State’s motion for summary judgment. The Court rejected De Piero’s argument that institutional bias against his views on race created a hostile work environment, finding no evidence that his treatment deviated from legitimate workplace standards. The Court concluded that no reasonable jury could determine that De Piero was reprimanded or terminated due to his complaints.
The Legal Landscape
Given the recent ruling by the Supreme Court, which eliminated affirmative action in college admissions, the Trump Administration’s dismantling of DEI programs, and the current position of the Equal Employment Opportunity Commission’s (EEOC) focus on rooting out illegal DEI initiatives, claims such as these are expected to rise.
DOJ Files Suit against Hawaii, Michigan, New York, and Vermont Related to Climate Legal Actions
The U.S. Department of Justice (DOJ) recently filed four lawsuits against states related to specific climate change actions they have taken or planned to take. On April 30, 2025, DOJ preemptively sued Hawaii and Michigan to prevent both states from going forward with their stated intent to pursue legal action against fossil fuel companies for alleged harms caused by climate change and to declare those states’ claims unconstitutional. The following day, on May 1, 2025, DOJ sued New York and Vermont for their enactment of climate “superfund” laws, which create retroactive cost recovery claims on producers of fossil fuels, seeking to enjoin the enforcement of those statutes and to have them declared unconstitutional as well.
DOJ’s lawsuits come on the heels of President Trump’s April 8, 2025 Executive Order, Protecting American Energy From State Overreach. The Executive Order directs the DOJ to identify any and all laws “burdening” the use or production of domestic energy and to “expeditiously take all appropriate action to stop the enforcement of [the] laws.”
While state and local government initiated climate lawsuits have been ongoing through state courts for some time, the lawsuits filed by DOJ under this Administration are a new approach building the federal government’s “active and continuous” interest in maintaining its control over energy and climate policy. The four lawsuits allege the climate “superfund” laws and any state-based claims pertaining to climate-related damages are preempted by the comprehensive nature of the Clean Air Act. Similarly, DOJ avers that constitutional due process prevents the states from imposing extraterritorial liability for primarily out-of-state activity.
DOJ additionally claims that the laws and lawsuits facially discriminate against interstate commerce and would impose substantial undue burden that would disrupt the national market for fossil fuels. Likewise, DOJ alleges violations of the Foreign Commerce Clause because the lawsuits and laws discriminate against foreign commerce and impose liability that is not fairly related to the services provided in the states. Lastly, DOJ claims the laws and lawsuits seek to regulate a “uniquely international problem” and undermine and interfere with U.S. foreign policy, which is exclusively in the purview of the federal government, and thus are preempted by the Foreign Affairs Doctrine.
DOJ’s proactive strategy of filing original lawsuits to attack the four states’ actions puts the full weight of the federal government behind arguments that have been made by defendants in other cases. It also serves as a signal to other states that may be considering similar actions.
Hawaii and Michigan Announced Climate Lawsuits
DOJ’s lawsuits against Hawaii and Michigan are notable for seeking to preemptively block the states from filing lawsuits against fossil fuel producers for alleged climate related damages. Attorneys General for both states had previously announced their intention to sue fossil fuel producers, but, at the time of DOJ’s filings, neither state had initiated any legal action. Subsequent to DOJ’s filings, Hawaii moved forward to file its lawsuit against seven oil and gas companies in the First Circuit Court in Honolulu.
New York and Vermont Climate Superfund Laws
Vermont was the first state to enact a climate “superfund” law, with New York quickly following suit. These laws claim to draw inspiration from the federal Superfund law; however, they are very different from the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). They create retroactive liability for responsible parties but apply it to prior emissions of greenhouse gas (GHGs) into the environment by companies that have previously extracted or refined fossil fuels. The Vermont and New York laws explicitly establish strict liability on out-of-state sources of GHG emissions. 10 V.S.A. § 597(1); N.Y. Env’t Conserv. § 76-0103(2)(a).
Both statutes enable cost recovery claims on any entity engaged in the trade or business of extracting fossil fuel or refining crude oil and is determined to be responsible for one billion tons of global greenhouse gas emissions. 10 V.S.A. § 596(22); N.Y. Env’t Conserv. § 76.0101(20). Funds collected in response to cost recovery demands will be placed in a “climate superfund” to be used to pay for qualifying climate change adaptation projects and implement climate adaption action as identified by their respective agencies designated to oversee the funds.
Vermont’s statute covers GHGs from fossil fuels extracted or refined by a responsible party from January 1, 1995, to December 31, 2024, and New York’s law covers a wide range of conduct, including production, transport, and sale or distribution of fossil fuels, that occurred from January 1, 2000, to December 31, 2018. New York’s statute places an overall $75 billion cap on recovery from responsible parties, holding them strictly liable for their respective shares of the $75 billion based on the amount of emissions. Vermont’s law, however, places no cap on the recovery of penalties and allocates liability for each responsible party “equal to an amount that bears the same ratio to the cost to the State of Vermont and its residents” from emissions during the applicable time period under the statute. N.Y. Env’t Conserv. § 76-0103(3); 10 V.S.A. § 598(b).
These laws are novel because each attempts to recover compensatory damages from companies that have lawfully sold substances in commerce, and each purports to reach conduct wholly outside of the enacting state’s borders. Several other states, including California, Maryland, Massachusetts, New Jersey, and Oregon, are in the process of considering similar legislation. Both the proposed California and Oregon climate “superfund” legislation would include a private right of action provision which could allow individuals or entities allegedly harmed by climate-related impacts to sue fossil fuel companies for damages.
Up in Smoke: Statutory Trademark Damages Can Exceed Actual Damages
Addressing a jury’s statutory damages award that surpassed the plaintiffs’ actual damages, the US Court of Appeals for the Eleventh Circuit affirmed the district court’s denial of the defendant’s motion for judgment as a matter of law (JMOL), finding that the award was consistent with trademark damages law given the jury’s finding of no willfulness and was not violative of constitutional due process. Top Tobacco, L.P. v. Star Importers & Wholesalers, Inc., Case No. 24-10765 (11th Cir. Apr. 30, 2025) (Pryor, Grant, Kid, JJ.)
Top Tobacco, Republic Technologies, and Republic Tobacco (collectively, Republic) sued Star Importers & Wholesalers for trademark violations and the sale of counterfeit cigarette rolling papers. Prior to trial, the district court granted summary judgment in favor of Republic. Thus, the only issues tried to the jury were damages related, including whether Star’s conduct had been willful, whether the company’s president should be personally liable, and the appropriate damages award.
Republic sought damages under 15 U.S.C. § 1117(c) of the Lanham Act, permitting the jury to look beyond actual damages and award up to $200,000 per non-willfully infringed mark or $2 million per willfully infringed mark. The jury instructions explained to the jury that it could consider multiple factors, including lost revenue, the conduct’s willfulness, and whether the counterfeit goods were a public safety risk. The instructions also clarified that the statute permitted both compensatory and punitive rationales for the award, as long as it was not a windfall for Republic. Ultimately, the jury found that Star’s conduct had not been willful and granted the plaintiffs $123,000 per infringed mark. Star moved for JMOL, arguing the total $1.107 million award was inconsistent with the finding of no willfulness. The district court denied the motion. Star appealed.
The Eleventh Circuit affirmed the district court’s denial of the JMOL motion, concluding that:
The jury was permitted to provide an award greater than actual damages.
The jury was permitted to consider punitive and deterrence rationales despite finding the actions were not willful.
The award did not violate constitutional due process.
Applying the principles of statutory construction, the Eleventh Circuit explained that because § 1117(a) permits an award for actual damages, § 1117(c)’s purpose was explicitly to allow awards greater than the actual loss suffered. Further, the jury’s role of factfinder under the Seventh Amendment precluded the district court from overriding a verdict that fell within the statute. Finally, the Court noted that the jury instructions were a safeguard against punishing defendants without any regard for actual damages because the instructions protected against a windfall for the plaintiff. In this case, the jury had facts regarding the marks’ strength, potential dangers of the counterfeit papers’ chemicals, and the prevalence of counterfeiting in the industry. Thus, the Court found that the jury had substantial evidence for the award – which was below the statutory maximum – and that it was not a windfall for Republic.
Similarly, the Eleventh Circuit reasoned that since the jury awarded damages below the statutory maximum for non-willful infringement, the award was not unduly punitive. Star did not object to the jury instructions at trial, and even if Star had objected, the instructions were consistent with law. Statutory damages under the Lanham Act can encompass both punishment for willfulness and deterrent value for any future conduct without requiring both.
Finally, constitutional due process only outlaws damages awards that are disproportionate to the underlying action such that they are severe and oppressive. The Eleventh Circuit explained that an award within a statutory range that accounts for both private injury and public policy considerations is not disproportionate.
AG’s Power Holds, but Agency Shortcuts Don’t
In Att’y Gen. v. Town Milton, the court ruled that the Massachusetts Bay Transportation Authority (“MBTA”) Communities Act, G. L. c. 40A, § 3A (“Section 3A”), is constitutional, and that the Attorney General has the authority to sue to enforce it and obtain injunctive relief compelling compliance. However, because the Executive Office of Housing and Livable Communities (“HLC”) did not comply with the Administrative Procedure Act (“APA”) when promulgating the corresponding guidelines, the guidelines were unenforceable.
Section 3A was enacted to address the housing crisis in Massachusetts. It requires that cities and towns that benefit from having local access to MBTA services adopt zoning laws that provide for at least one district where multifamily housing is “as of right” located near their local MBTA facilities. The statute provides that noncompliant MBTA communities are ineligible for funds from certain state funding sources. Section 3A directs the HLC and three other State agencies to promulgate guidelines to determine if an MBTA community has complied with § 3A. HLC issued its final guidelines in August 2023, but did not file with the Secretary of the Commonwealth a notice of public hearing, a notice of proposed adoption or amendment of a regulation, or a small business impact statement within the meaning of the APA.
In February 2024, residents of the town of Milton (“Town”), an MBTA community, voted down a proposed zoning scheme to satisfy the requirements of Section 3A. The Attorney General then brought suit against the Town to enforce compliance with Section 3A. The Town denied violation of Section 3A and filed a counterclaim seeking declaratory relief. The Town asserted that Section 3A provides for an unconstitutional delegation of legislative authority because it improperly vests HLC with the power to make fundamental policy decisions. The Town further claimed that HLC’s guidelines were not promulgated in accordance with the APA. Lastly, the Town argued that the Attorney General lacks the power to enforce the act.
The Court granted declaratory relief in part and dismissed the Town’s remaining claims. First, the Court held that Section 3A was constitutional. The legislative delegation of authority to HLC to determine whether a community is in compliance with Section 3A did not violate the separation of powers doctrine.1 The Legislature did not improperly abandon its policy-making role where: the language of the statute made clear the Legislature’s policy goal, the parameters provided by § 3A were sufficient to guide the HLC, and § 3A sufficiently guarded against potential abuses of discretion by HLC.
Second, the Court held that the Attorney General is empowered to enforce Section 3A notwithstanding the lack of any reference to such power in the statute and notwithstanding the penalties already provided for in the statute. The Court explained that the Attorney General has broad authority to enforce the laws of the Commonwealth and act in the public interest, and that the enforcement power is not dependent upon whether a particular statute references such power. The Court rejected the Town’s argument that the Attorney General may not bring an enforcement action because Section 3A already includes consequences for noncompliance (ineligibility for certain funding sources). The Court found that the Legislature did not intend that the only consequence for an MBTA community for failing to comply with the act would be the loss of funding opportunities. The Court recognized that the Attorney General, as the chief law enforcement officer of the Commonwealth, has authority to seek injunctive relief compelling compliance with state statutes in the absence of some express statute to the contrary.
Lastly, the Court held that HLC’s guidelines as promulgated were unenforceable because HLC failed to comply with the APA. The APA requires State agencies to take certain steps when promulgating regulations in order to give notice and afford interested persons an opportunity to present data, views, or arguments. The Court explained that the purpose of the APA is to create uniformity in agency proceedings and to establish a set of minimum standards of fair procedure below which no agency should be allowed to fall. The Court noted that the APA leaves no room for substantial compliance with respect to promulgating rules and that strict compliance for agencies is compelled by the plain terms of the statute. The Court held that because HLC failed to file notice of a proposed regulation with the Secretary of the Commonwealth along with a small business impact statement, as required by the APA, HLC’s guidelines were legally ineffective and had to be repromulgated in accordance with G. L. c. 30A, § 3, before they could be enforced.
The Court remanded the case, directed the single justice to enter a declaratory judgment consistent with the Court’s opinion, and dismissed the remaining claims.
1The Court explained that to determine whether a legislative delegation of authority violates the separation of powers doctrine, Courts consider three factors: (1) did the Legislature delegate the making of fundamental policy decisions, rather than just the implementation of legislatively determined policy; (2) does the act provide adequate direction for implementation; and (3) does the act provide safeguards such that abuses of discretion can be controlled?
Twenty States Sue the Trump Administration for HHS Program Eliminations and Staff Layoffs
Nineteen states plus the District of Columbia filed a federal Complaint in U.S. District Court for the District of Rhode Island on May 5, 2025 alleging that the Trump Administration’s recent activities to downsize and restructure the Department of Health and Human Services (HHS) are unlawful under both the U.S. Constitution and the Administrative Procedure Act (APA). The coalition of states, led by New York, is asking the judicial branch for declaratory and injunctive relief “to prevent the unconstitutional and illegal dismantling of the Department.” In addition to New York and the District of Columbia, states joining the lawsuit comprise Arizona, California, Colorado, Connecticut, Delaware, Hawai’i, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin (together, the Plaintiff States). This is but one among multiple legal challenges to the ongoing programmatic and research cuts within HHS and its sub-agencies, such as the National Institutes of Health, Food and Drug Administration, and Centers for Medicare and Medicaid Services.
In their Complaint, the Plaintiff States emphasize that the department was both created by Congress via statutory enactments and that many of its mandates are congressionally directed, with significant federal appropriations allocated to HHS every year. They point out that “[i]ncapacitating one of the most sophisticated departments in the federal government implicates hundreds of statutes, regulations, and programs.” The plaintiffs allege, therefore, that the restructuring and reduction in force (RIF) actions taken by HHS Secretary Kennedy and the other named defendants, which ignore those statutory mandates and refuse the spend funds appropriated to HHS for designated purposes, violate the U.S. Constitution’s appropriations clause as well as separation of powers principles.
We have previously blogged about HHS’s recent restructuring and RIF actions, as well as the Trump administration’s plans for reducing the overall HHS discretionary budget. In its factual allegations, the Plaintiff States’ Complaint sets out a detailed timeline of actions taken by the Trump administration to dismantle the department, beginning on January 21, 2025 immediately after the presidential inauguration. It also points to the White House Office of Management and Budget (OMB) fiscal 2026 internal HHS budget document, dated April 10 and leaked on April 16 (which we discussed here), as evidence that the administration’s plan from day one of its tenure was to eviscerate the department.
The Plaintiff States further argue that the Trump administration’s actions in this area have been arbitrary and capricious under the APA’s legal standard “because the department’s stated reasons for the layoffs and reorganization – to promote ‘efficiency’ and ‘accountability’ – are pretext for Secretary Kennedy’s stated goal of attacking science and public health.” In support of this contention, the Plaintiff States summarize Secretary Kennedy’s long history of public statements criticizing HHS and various of its public health functions using vitriolic language and baseless claims about global conspiracies.
The Complaint also highlights specific examples of injuries that have already occurred to the Plaintiff States and their citizens as a result of the March 27, 2025 HHS reorganization announcement and the subsequent actions since then to terminate employees, programs, and offices. Among other things, it notes that “employees who remain at HHS have been prevented from collecting and reviewing new applications; designing, distributing, and implementing new policies and guidance; collecting and distributing scientific data; issuing obligated funds to the Plaintiff States and others; investigating for program integrity; and responding to any manner of public inquiry.” One specific example cited in the Complaint relates to the closure of infectious disease laboratories run by the Centers for Disease Control & Prevention (CDC). Without those specialized CDC testing labs, state public health laboratories throughout the country are being directed via CDC’s webpage to send their patient samples to New York State’s Wadsworth Center, which has “elite capabilities” and can test for rare and complex diseases “that cannot be done anywhere else in the country except for the CDC before April 1,” the Plaintiff States explain. However, they point out that the New York lab “was not built to replace the CDC and it simply could never fill that hole.” With a halt to so much testing by CDC, including for widespread public health needs such as foodborne pathogens and tuberculosis, our public health infrastructure is undoubtedly being damaged, and outbreaks will become more frequent. The terminations also are directly at odds with Congress’s legislative directives to CDC to protect the public health.
Throughout U.S. history to date (as we approach the country’s 249-year birthday this coming Independence Day), and as envisioned by the authors of our constitution, the three branches of the federal government are treated as “co-equals,” with due respect accorded to one another and the critical roles each one plays in the delicate balance that is our tri-partite system of federal governance. So, although the federal courts should be an effective way to curtail perceived lawlessness by the executive branch, the current administration has demonstrated a willingness to ignore injunctions and other judicial orders (for example, see here). We will monitor the outcome of this important legal challenge in the Rhode Island District Court, as well as any future appeals. However, it is very possible that the Plaintiff States will not get the relief they are requesting, even if the federal courts agree with them regarding the nature of the executive’s actions to dismantle much of HHS without prior notice to Congress or a chance to ensure that mandatory public health functions can continue.
This very real potential outcome of the federal court litigation strongly suggests that Congress must get involved to exert effective oversight and some form of a “check” on the executive branch if we are to retain many of our nation’s critical health and human services functions. These include critical HIV prevention, environmental health, and tobacco control functions that have been substantially damaged (although ending such programs is seemingly incompatible with much of Secretary Kennedy’s Make America Healthy Again agenda that seeks to reduce the burden of chronic diseases). Health care and life sciences stakeholders can contact their congressional representatives and can also submit comments to any open HHS or OMB docket that affects their interests, rather than relying solely on the outcome of judicial processes, given the extraordinary political times we are experiencing in 2025.
Appeals Court Rejects AstraZeneca’s Challenge to Medicare Drug Price Negotiation Program
A federal appellate court has handed down the first appellate-level decision addressing the merits of drug manufacturers’ challenges to the Inflation Reduction Act of 2022’s (IRA) Medicare Drug Negotiation Program (Negotiation Program). On Thursday, May 8, 2025, a three-judge panel of the Third Circuit affirmed the district court’s rejection of AstraZeneca’s constitutional and regulatory challenge to the Negotiation Program. The Third Circuit’s decision is significant because that court has appellate jurisdiction over five of the nine cases challenging the Negotiation Program. The three-judge panel in AstraZeneca has also been assigned to each of the four remaining cases in that circuit. Although AstraZeneca’s case was the narrowest of the five Third Circuit cases, the court’s opinion could shed light on what is to come in the remaining cases.
Constitutional Violation
The Third Circuit rejected AstraZeneca’s sole constitutional claim arguing that the Negotiation Program violates AstraZeneca’s procedural-due-process rights under the Fifth Amendment. AstraZeneca had argued that the Negotiation Program unconstitutionally deprived AstraZeneca of its property right to sell its drugs at a market rate. The Third Circuit, in line with the district courts that have addressed the issue, disagreed, holding that AstraZeneca has no property right to sell its products nor demand government reimbursement at specific prices. The court also dismissed AstraZeneca’s argument that the Negotiation Program does not allow sufficient judicial review of the government’s price-setting decisions. The court was unpersuaded by AstraZeneca’s analogy to a Supreme Court case analyzing the scope of judicial review for a World War II-era rent-control law. The fact that Part D plans, which are private parties, are the recipients of the drugs, the Third Circuit said, does not mean that the government is setting prices for private-market transactions here.
APA Violations
The court of appeals also dismissed AstraZeneca’s Administrative Procedures Act (APA) challenges to CMS’s Negotiation Program Guidance. AstraZeneca argued that CMS guidance outlining the bona fide marketing standard and choosing to aggregate different products approved under different NDAs and BLAs is unlawful. The Third Circuit agreed with the district court that it lacked jurisdiction over AstraZeneca’s claims because AstraZeneca had not adequately shown that it has or will imminently suffer a cognizable Article III injury in fact as a result of CMS’s guidance. Unlike Novo Nordisk, who had multiple products grouped together for negotiation based on the same active moiety, AstraZeneca faced only an alleged risk that its products would similar be grouped together. Further, the Third Circuit said that AstraZeneca failed to submit concrete evidence that CMS’s guidance has or is currently causing AstraZeneca to change anything about how it is operating its company. The court therefore did not address the merits of the alleged APA violations.
What Comes Next?
Five other challenges are pending before appeals courts in the Third and Second Circuits. AstraZeneca was argued on the same day, and before the same three-judge panel, as Bristol Myers Squibb’s and Johnson & Johnson’s appeals. The same panel earlier this spring also heard appeals from Novo Nordisk’s and Novartis’s challenges, which were also both rejected by the district courts on similar grounds to those in AstraZeneca. The opinions in those cases may follow shortly. Once those rulings are issued, the Third Circuit will have weighed in on nearly all the arguments manufacturers have lobbed at the Negotiation Program. The Second Circuit heard arguments in Boehringer Ingelheim’s challenge in April and will likely issue a ruling the coming months.
Meanwhile, we expect that AstraZeneca will seek the Supreme Court’s review. Even if the high court agrees to take up the case, it will likely not hear arguments and issue a decision until late in 2025 or even in 2026 because it will soon enter its summer recess. That timing may also allow the justices to consolidate AstraZeneca with the remaining cases, offering them the opportunity to address all the various challenges at once. Because the Supreme Court has discretion to review only parts of a case, we may also see the manufacturers begin to whittle down their claims to home in on only those arguments that manufacturers believe are most likely to persuade the justices.
Revised Draft California Privacy Regulations Lessen Impact on Business
The rulemaking process on California’s Proposed “Regulations on CCPA Updates, Cybersecurity Audits, Risk Assessments, Automated Decisionmaking Technology, and Insurance Companies” (2025 CCPA Regulations) has been ongoing since November 2024. With the one-year statutory period to complete the rulemaking or be forced to start anew on the horizon, the California Privacy Protection Agency (CPPA) voted unanimously to move a revised set of draft regulations forward to public comment on May 1, which began May 9 and closes at 5 pm Pacific June 2, 2025. The revisions cut back on the regulation of Automated Decision-making Technology (ADMT), eliminate the regulation of AI, address potential Constitutional deficiencies with regard to risk assessment requirements and somewhat ease cybersecurity audit obligations. This substantially revised draft is projected by the CPPA to save California businesses approximately 2.25 billion dollars in the first year of implementation, a 64% savings from the projected cost of the prior draft.
ADMT: Most notable changes relate to ADMT, which are said to result in an 83% cost savings for businesses compared to the prior draft. “Cut to the bone,” is the way Chair Jennifer Urban characterized it, which is welcome news to many, including likely California Gavin Newson, who had sent the CPPA a letter stating that he was “pleased to learn about the Board’s decision, at its April 4, 2025 meeting, to direct Agency staff to narrow the scope of the ADMT regulations.” The revised ADMT regulations now no longer address “artificial intelligence” at all and include the following revisions (among others):
Deleting the definition “extensive profiling” (behavior advertising or monitoring employees, students or publicly available spaces) and shifting to focus on transparency and choice obligations to use to make a significant decision about consumers. However, risk assessments would still be required for profiling based on systemic observation and training of ADMT to make significant decisions, to verify identity, or for biological or physical profiling.
Streamlining the definition of ADMT to “mean any technology that processes personal information and uses computation to replace … or substantially replace human decision-making [which] means a business uses the technology output to make a decision without human involvement.” Prior drafts had covered use to help facilitate human decisions.
Streamlining the definition of significant decisions to remove decisions regarding “access to” and limit applicability to the “provision or denial of” the following more narrow types of goods and services: “financial or lending services, housing, education enrollment or opportunities, employment or independent contracting opportunities or compensation, or healthcare services,” and clarifying that use for advertising is not a significant decision.
Obligations to evaluate the risk of error and discrimination for certain types of ADMT uses were deleted, but the general risk assessment obligations were largely kept. The requirement to implement policies, procedures and training to ensure that certain types of ADMT work as intended and do not discriminate were removed.
Pre-use notice obligations were streamlined.
Opt-out rights were limited to uses to make a significant decision.
Businesses were given until January 1, 2027, to comply with the ADMT regulations.
Cybersecurity Audits: Also pared back, though more through a phase-in of implementation than regarding substantive requirements, are the draft regulations on cybersecurity audits. Here are the highlights of where the CPPA landed:
Timing for completion of a first annual cybersecurity audit and filing an audit report with the state will depend on the size of the business:
April 1, 2028: $100 million + gross revenue.
April 1, 2029: between $50 million and $100 million.
April 1, 2030: under $50 million.
Rather than requiring the Board of Directors to review audit results and certify their sufficiency, such obligations were changed to a member of management with responsibility for cybersecurity.
The aspects of what an audit must assess remain broad, including the sufficiency of inventory and management of personal information and the business’ information systems, including “data maps and flows identifying where personal information is stored, and how it can be accessed” and hardware and software (including cookies) inventories and an approval and prevention processes.
Privacy Risk Assessments: We have detailed the prior drafts of the risk assessment regulations here. The latest draft not only reflects the ADMT changes discussed above but also a more thoughtful approach to the purpose and process for conducting and documenting assessments:
In keeping with the removal of the concepts of “extensive profiling” (public monitoring, HR/educational monitoring and behavioral advertising) under the ADMT regulations, these concepts were also removed from the types of high-risk activities that require a risk assessment, but were replaced with “profiling a consumer through systematic observation of that consumer when they are acting in their capacity as an educational program applicant, job applicant, student employee or independent contractor for the business” and “profiling a consumer based upon their presence in a sensitive location.” However, in the draft published for comment, these activities were more narrowly defined to include only use of such observation “to infer or extrapolate intelligence, ability, aptitude, performance at work, economic situation, health (including mental health), personal preferences, interests, reliability, predispositions, behavior, location or movements[,] but excluding “using a consumer’s personal information solely to deliver goods to, or provide transportation for, that consumer at a sensitive location.” These edits are responsive to concerns raised by Board member Mactaggart (e.g., a nurse ordering pizza delivered to work).
The high-risk assessment trigger of training ADMT or AI was modified to remove the reference to AI and limited to where the business intends to use the ADMT for a significant decision concerning a consumer, or to train facial recognition, emotion recognition, or other technology that verifies a consumer’s identity, or conducts physical or biological identification or profiling of a consumer. Triggers tied to the generation of deepfakes and the operation of generative models, such as large language models, were removed.
The other high-risk activities from prior drafts remain: selling personal information, sharing personal information (for targeted advertising), and processing sensitive personal information.
While risk assessments must still include a harm-benefit analysis (Section 7152(a)(4) and (5)), that information, and the business judgment analysis as to the pros and cons thereof, is no longer required to be included in the form of Risk Analysis Report (a new term) that is subject to government inspection. This will make the assessment requirements much less vulnerable to First Amendment challenge as unconstitutional compelled speech on a matter of opinion and not mere recitation of facts, a concern publicly expressed previously by at least one CPPA Board member. This is a very significant development. [Note that while the Colorado regulations require documentation of such a risk-benefit analysis as part of assessment documentation, they also provide that assessments may be subject to legal privilege protections.]
Similarly, the forms of assessment summaries that must be filed with the state are limited to factual recitations and the new draft abandons the prior approach of requiring filing of abridged assessments summarizing each assessment in favor of a single attestation of annual compliance with some basic information on the number of assessments, in total and by type of covered processing activities, and which categories of personal information and/or sensitive personal information was covered. This substantially reduces what must be disclosed in agency filings and again helps insulate against compelled speech challenges.
Also, likely to address Constitutional issues, Section 7154 was changed from prohibiting processing activities if risks to consumer privacy are not outweighed by identified benefits, to expressing that the goal of risk assessments is to serve to prohibit or restrict processing activities if privacy risks outweigh processing benefits. This should go a long way to protect a business’s subjective business judgment and ethical value decisions that should not be subject to second-guessing by the government, absent violation of clear and unambiguous statutory requirements.
While high-risk activities occurring on and after the effective date of the regulations (likely before the end of 2025) will be subject to assessment, businesses will have until December 31, 2027, to complete the documentation of the corresponding Risk Assessment Reports through that date, and the filing of the first annual assessment attestation would not be due until April 21, 2028.
Finally, the amendments to the existing regulations were revised:
What stayed in:
If a business maintains personal information (collected after January 1, 2022) for longer than 12 months, it must enable consumers to specify a date range or treat the request as without time limitation.
A business must ensure that when a consumer corrects their personal information, it remains corrected.
A business must inform consumers who make corrections of their personal information of the source of the incorrect data or inform the source that the information was incorrect and must be corrected.
Symmetry of choice applies to any opt-in, not just an opt-in after opt-out.
A website must display the status of opt-out choice based on GPC / OPPS browser signals or opt-out request. [Most CMPs already have this feature as optional.]
A business must provide a means to confirm that a limit-sensitive information processing request has been received and is being honored.
In verifying agent authority and the consumer’s identity, a business may not require the consumer to resubmit an individual request.
Consumer statements regarding contested accuracy of health data, which are already required, must be shared with recipients of that data if the consumer requests.
What got cut:
The requirements of businesses and service providers to implement measures to ensure deleted personal information remains deleted or de-identified was removed.
The requirement to inform consumers, as part of a request response, of their right to file a complaint with the state was removed.
The requirement to inform those to which it has disclosed personal information of a subsequent consumer correction was removed.
The requirements to provide internal and external notice of consumer claims of inaccuracy that were not corrected (due to insufficient proof), unless the request was fraudulent or abusive, were removed.
The current revisions are subject to additional revisions based on the new round of public comment, which could lead to adding back or otherwise changing provisions. However, the CPPA Board members all seemed to express the opinion at the May 1 meeting that a set of regulations needed to be timely completed, and that future rulemaking could build on the foundation of the draft that has been advanced. Accordingly, it would appear that we are at the “home stretch” with the finish line in clear view.
The Hypocrisy of “Delete IP”: Billionaire Frustrations Masquerading as Policy
Jack Dorsey’s recent tweet, “delete all IP,” and Elon Musk’s echo, “I agree,” are not serious policy proposals—they’re the petulant grumblings of billionaires frustrated that intellectual property laws are interfering with their ambitions. These statements are particularly rich coming from men whose companies have aggressively accumulated intellectual property rights: According to the USPTO’s database, Dorsey’s Twitter secured 410 U.S. patents, while Musk’s Tesla amassed 879. Their current distaste for IP conveniently arises now that their market dominance makes such protections less essential—for them.
Both Dorsey and Musk are deeply involved in artificial intelligence, a field that relies heavily on vast amounts of written material—much of it copyrighted—for training models. Whether this use constitutes copyright infringement is currently being litigated. If courts finally determine that it is infringement, the implications for AI development could be substantial. Of course, developers could turn to public domain materials, but if that’s the route, be prepared for your AI assistant to start speaking in “forsooths,” “prithees,” and “perchances.” The obvious (and apparently odious) alternative? Pay fair value for the content being used.
Musk once told Jay Leno, “patents are for the weak.” There’s a kernel of truth there—not because patents are inherently flawed, but because they level the playing field. Patents exist precisely to empower the weak: to incentivize inventors and protect them as they challenge entrenched giants. Abraham Lincoln famously described patents as having “added the fuel of interest to the fire of genius.” Patents don’t just reward inventors—they give entrepreneurs the confidence to invest in the risky business of innovation.
While Dorsey and Musk may be targeting copyright more than patents, the principle remains the same. Copyright is designed to reward creators by granting them property rights over their work—rights that encourage the creation and dissemination of culture and knowledge. As poet Joel Barlow eloquently argued in 1783, after authors dedicate their lives to honing their craft, it is a matter of “natural justice” that they should profit from their labor and reputation.
This principle was enshrined in the U.S. Constitution on March 4, 1789, when Article I, Section 8, Clause 8 gave Congress the authority “[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Congress exercised this power almost immediately with the Patent Act of 1790 and the Copyright Act of the same year.
For over 235 years, intellectual property has fueled innovation, creativity, and economic growth in America. The call to “delete all IP” reeks of a “pull up the ladder” mentality—a cynical effort by technology oligarchs who benefited from IP protections to now deny them to others, simply because they’ve become inconvenient. If Musk and Dorsey are as visionary as they claim, they should propose a fair compensation system for AI training. Don’t blow up the system that nurtured generations of inventors and authors—build something better.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of The National Law Review.
The State of Employment Law: Ohio’s Unusual Constitutional Minimum Wage Protections
In this series, we will explore some of the ways states vary from one another in their employment laws.
State minimum wage laws are common. Every state except Louisiana, Mississippi, and South Carolina has a law setting a minimum wage. Colorado, Florida, and Ohio take this a step further by including minimum wage provisions in their state constitutions. Of those three states, Ohio stands apart with some relatively extensive requirements for minimum wage record keeping.
Pursuant to Article II, Section 34a of Ohio’s Constitution, employers must maintain records of each employee’s name, address, occupation, pay rate, hours worked for each day worked, and total amount paid to the employee. Employers are responsible for maintaining such records for at least three years following the last date on which each employee was employed. Any employee has the right to request these records from their employer (and, in my experience, Ohio plaintiff’s lawyers frequently request this information when they send demand letters). If an employer has failed to maintain the required information, an employee has a private right of action and can recover equitable and monetary relief.
Ohio is generally regarded as a fairly pro-employer state, and it does relatively little to regulate employment relationships compared to other states. Consequently, it is surprising that Ohio, of all states, has such a constitutional protection related to its minimum wage. Employers that do business in Ohio should be aware of this constitutional requirement and take care to preserve the required records for current and recently-separated employees.
Top Five Labor Law Developments for April 2025
U.S. Supreme Court Chief Justice John Roberts temporarily halted a U.S. Court of Appeals for the D.C. Circuit Court order reinstating National Labor Relations Board Member Gwynne Wilcox. Trump, et al. v. Wilcox, et al., No. 24A966 (Apr. 9, 2025). Following President Donald Trump’s unprecedented termination of Board Member Wilcox, the D.C. Circuit issued an en banc order reinstating her to the Board, citing the Court’s 1935 decision in Humphrey’s Executor that upheld the constitutionality of for-cause removal protections for federal agency leaders. The Trump Administration filed an emergency application to the Court for a stay of the D.C. Circuit’s order, arguing subsequent case law narrowed Humphrey’s Executor to apply only to multi-member agencies that do not wield substantial executive power, making the case inapplicable to the Board. Although Chief Justice Roberts’ order temporarily pauses Wilcox’s reinstatement, Wilcox has filed a response to the stay application urging the Court to deny the stay until the D.C. Circuit can issue a decision on the merits of the case. Wilcox also requested that the Court deny the Trump Administration’s petition for certiorari before the D.C. Circuit’s decision, arguing the request to rush the Court’s normal appeal procedures is unwarranted.
A Washington, D.C. federal judge blocked President Trump’s executive order (EO) aiming to exclude certain federal agencies and their subdivisions involved in national security from collective bargaining. National Treasury Employees Union v. Donald J. Trump, et al., No. 1:25-cv-00935 (D.D.C. Apr. 25, 2025). Pursuant to the EO, covered agencies (including the Departments of Defense, Justice, and State) were no longer required to engage in collective bargaining with unions. The National Treasury Employees Union (NTEU), which represents federal workers in 37 departments and agencies, requested a preliminary injunction arguing the order was retaliatory against the unions. The injunction applies to all employees that NTEU represents. Because NTEU was the filing party, employees represented by other unions are not included in the order.
A coalition of unions, nonprofit groups, and local governments filed a complaint in a California federal court arguing President Trump lacks the constitutional authority to downsize or reorganize federal agencies without congressional approval. The lawsuit stems from an EO aiming to reduce the size of the federal government’s workforce and directing each agency head to work with the Department of Government Efficiency on hiring plans. The coalition, which includes national unions such as the Service Employees International Union and the American Federation of State, County and Municipal Employees, as well as the City of Chicago and City of San Francisco, claims the EO violates the U.S. Constitution’s separation of powers and the Administrative Procedure Act. The coalition requests the court to vacate the executive order and the related reorganization plans.
William Emanuel, former Board member and management-side labor attorney, has passed away. Emanuel was appointed to the Board by President Trump in 2017 and served until 2021. Emanuel’s confirmation to the Board gave the Board its first Republican majority in more than a decade. During his time on the Board, Emanuel was involved in reversing a wide range of union-friendly rulings and decisions issued under the Obama Administration, bringing significant changes to Board law.
Former Board General Counsel Jennifer Abruzzo has joined a union-side law firm as an attorney and rejoined the Communications Workers of America (CWA) as a senior advisor. President Trump terminated Abruzzo shortly after Inauguration Day in an expected move. She previously held various roles at the Board and formerly served as special counsel at the CWA. Abruzzo’s time at the Board was marked by aggressive initiatives resulting in overturning precedent on many issues, including expansion of protected concerted activity, increased use of enhanced remedies for unfair labor practice charges, and making it easier for employees to unionize without an election, among others. President Trump recently nominated management-side labor attorney Crystal Carey as the new general counsel. She is awaiting U.S. Senate approval.
No Supremacy Clause Preemption Where State Statute Doesn’t Conflict With Federal
The US Court of Appeals for the Fifth Circuit explained that ordinarily, when state law contradicts with federal law, the state law may be preempted by the federal law under the US Constitution’s Supremacy Clause. However, under Supreme Court precedent, state unfair-competition laws that accurately mirror the relevant provisions of federal law are not subject to preemption. Zyla Life Sciences, LLC v. Wells Pharma of Houston, LLC, Case No. 23-20533 (5th Cir. April 10, 2025) (Oldham, Ho, Duncan, JJ.)
Under the federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., no one may sell any new drug without prior approval from the US Food and Drug Administration (FDA). Because compounded drugs are not new but are merely remixed versions of existing drugs, registered compounding facilities are allowed to sell compounded drugs as long as they satisfy additional criteria specified in the FDCA. Six states mirror federal law by making it illegal to sell any new drug without FDA approval and provide for suit under traditional state unfair-competition law if a party sells drugs in violation of these state laws.
Zyla and Wells Pharma are competitors. Zyla sells FDA-approved suppositories containing indomethacin, a drug used to treat various ailments such as rheumatoid arthritis. Wells Pharma sells compounded indomethacin suppositories that are not FDA approved, but Wells Pharma is a registered compounding facility and thus satisfies at least one provision of the exemption. Zyla, seeking to enjoin Wells Pharma from manufacturing and selling its compounded suppositories in the six states mirroring the FDCA, filed suit under those states’ unfair-competition laws. Wells Pharma moved to dismiss under Fed. R. Civ. Pro. 12(b)(6), arguing that the state laws were preempted. After the district granted the motion, Zyla appealed.
The issue before the Fifth Circuit was whether the state laws conflict with the FDCA by incorporating it. As the Court explained, a state triggers implied “[o]bstacles-and-purposes preemption . . . when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Here, (quoting the California statute) the six state statutes at issue bar selling a “new drug” that has not been approved “under Section 505 of the [FDCA].” The Fifth Circuit, citing the 1949 Supreme Court decision in California v. Zook as controlling, concluded that where there is no conflict in statutory terms between the state and federal statutes, there is no preemption. Both a state and the federal government may regulate the same conduct – whether a state has provided an additional remedy in state law is irrelevant – and the FDCA itself permits states to regulate conduct related to drug safety and effectiveness concurrently with the federal government.
The Fifth Circuit reversed the district court’s order granting Wells Pharma’s motion to dismiss and remanded the case.