Washington State Enacts Antitrust Pre-Merger Notification Act
What Happened: On April 4, 2025, Washington was the first state to enact the Uniform Antitrust Pre-Merger Notification Act (the Act). The Act requires certain parties with a nexus to the state that make a Hart-Scott-Rodino (HSR) filing to also submit the filing to the state’s attorney general (AG).
The Bottom Line: Adoption of the Act requires direct notice of large transactions to the state AG’s office. The Act also promotes sharing of the information submitted among states that have enacted the Act. As more states pass their own versions of the Act, state involvement in the review of such transactions may increase. Recently, some state AGs have taken a more active role in merger enforcement, including filing their own state court cases separately from the federal antitrust agencies. Certain state AGs have also said they stand ready to fill in gaps, if the federal agencies under President Trump become more lenient on antitrust enforcement.
The Full Story: Washington’s law requires a person making a Hart-Scott-Rodino (HSR) filing that (a) has its principal place of business in the state; (b) has annual net sales of 20 percent of the HSR threshold (adjusted annually, currently $126.4 million) of the goods or services involved in the transaction in the state; or (c) is a healthcare provider conducting business in the state, to also submit the HSR filing and attachments to the state AG’s office. The statute requires notice only, does not require payment of a filing fee and does not include additional enforcement powers or impose a waiting period on the transaction before the parties can close (as under HSR). Nor does the statute require both parties to submit their HSR filings to the state AG, as they must under HSR to the Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice (DOJ). The statute authorizes a civil penalty of $10,000 per day of noncompliance. The statute contains confidentiality measures, including exempting the information submitted from the state FOIA law. In certain merger investigations where state AGs join their federal enforcer counterparts (FTC or DOJ), state AGs will request waivers from the merging parties to allow for the federal enforcers to share material obtained from the merging parties (including their HSR filings) with state AG offices. Washington’s law is mandatory and obviates the need for the Washington AG to obtain a waiver to gain access to the HSR filing of a party with one of the above connections to the state.
Washington is the first state to enact the Uniform Antitrust Pre-Merger Notification Act (the “Act”), which was adopted last year by the Uniform Law Commission. Other states have introduced bills with versions of the Act, including California, Nevada, Utah, Colorado, West Virginia, and the District of Columbia. This is in addition to other state laws requiring pre-merger notification (baby HSRs) for certain transactions in the healthcare industry including in California, Colorado, Connecticut, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Nevada, New York, New Mexico, Oregon, Rhode Island, Vermont, and Washington.
Conclusion: As state-specific pre-merger notification regimes are adopted, state antitrust review of mergers is expected to become more active. During the first Trump administration, several blue state AGs challenged the T-Mobile/Sprint merger after DOJ and several red state AGs settled the case. Also, during the Trump 1.0, the California AG challenged Valero’s proposed acquisition of petroleum terminals from Plains All American Pipeline and obtained a settlement in the Cedars-Sinai/Huntington Memorial Hospital transaction after the FTC declined to take action. Under the Biden administration, the Washington AG and Colorado AG challenged the Kroger/Albertsons merger separately in state courts and chose not to join the FTC (and nine other state AG co-plaintiffs) in the FTC’s case brought in federal court. The New York AG just recently won its challenge of Intermountain Management’s acquisition of Toggenburg Mountain ski resort, a case brought under New York state antitrust law. AGs from Colorado, California, and Michigan have stated that they are committed to take independent enforcement action if warranted regardless of what their federal enforcer counterparts decide to do. Companies need to stay apprised of new state merger filing requirements, as well as increased state antitrust review of transactions. This is especially true for industries that are localized in nature such as healthcare and retail.
New Mexico Will Phase Out Products Containing Intentionally Added PFAS and Require Reporting; Exemptions Include Fluoropolymers
On April 8, 2025, New Mexico Governor Michelle Lujan Grisham (D) signed the Per- and Poly-Fluoroalkyl Substances (PFAS) Protection Act (HB 212). Like Minnesota and Maine, New Mexico will begin phasing out certain consumer products containing intentionally added PFAS, defining PFAS as “a substance in a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.” In 2032, New Mexico will prohibit products containing intentionally added PFAS unless the use of the PFAS is designated as a currently unavoidable use (CUU). Similar to Minnesota, New Mexico will also require manufacturers of products containing intentionally added PFAS to report certain information. New Mexico will exempt several products, however, from both the prohibition and reporting requirements. Most notably, the exemptions include products containing certain fluoropolymers.
Prohibited Products
In New Mexico, beginning January 1, 2027, a manufacturer may not sell, offer for sale, distribute, or distribute for sale the following products containing intentionally added PFAS:
Cookware;
Food packaging;
Dental floss;
Juvenile products; and
Firefighting foam.
Beginning January 1, 2028, New Mexico will prohibit manufacturers from selling, offering for sale, distributing, or distributing for sale the following products containing intentionally added PFAS:
Carpets or rugs;
Cleaning products;
Cosmetics;
Fabric treatments;
Feminine hygiene products;
Textiles;
Textile furnishings;
Ski wax; and
Upholstered furniture.
Beginning January 1, 2032, products containing intentionally added PFAS that are not exempt under New Mexico’s statute will be banned unless the use of the PFAS is determined to be a currently unavoidable use (CUU).
The products that New Mexico will prohibit are similar to the products that Minnesota and Maine have already prohibited or will be prohibiting. On January 1, 2025, Minnesota prohibited intentionally added PFAS in carpets or rugs, cleaning products, cookware, cosmetics, dental floss, fabric treatments, juvenile products, menstruation products, textile furnishings, ski wax, and upholstered furniture. As of January 1, 2025, Maine prohibits intentionally added PFAS in carpets or rugs, fabric treatments, and fabric treatments that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2026, Maine will prohibit intentionally added PFAS in cleaning products, cookware, cosmetics, dental floss, juvenile products, menstruation products, textile articles (with exception), ski wax, upholstered furniture, and products listed that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2029, Maine will prohibit intentionally added PFAS in artificial turf and outdoor apparel for severe wet conditions unless accompanied with a disclosure: “Made with PFAS chemicals.” Both Minnesota and Maine will prohibit products containing intentionally added PFAS beginning January 1, 2032, unless the use is a CUU, and Maine will prohibit products that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. As amended last year, Maine will prohibit intentionally added PFAS in cooling, heating, ventilation, air conditioning, and refrigeration equipment, as well as in refrigerants, foams, and aerosol propellants as of January 1, 2040.
Reporting Requirements
On or before January 1, 2027, New Mexico will require manufacturers of products containing intentionally added PFAS to report certain information, including:
A brief description of the product, including a universal product code (UPC), stock keeping unit (SKU), or other numeric code assigned to the product;
The purpose for which the PFAS is used in the product;
The amount of each PFAS in the product, identified by its Chemical Abstracts Service Registry Number® (CAS RN®) and reported as an exact quantity determined using commercially available analytical methods or as falling within a range approved for reporting purposes by the New Mexico Environment Department (NMED);
The name and address of the manufacturer and the name, address, and phone number of a contact person for the manufacturer; and
Any additional information requested by NMED as necessary.
NMED may grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may enter into an agreement with one or more states to collect information and may accept information from a shared system as meeting the information requirements.
As reported in our June 14, 2023, blog item, Minnesota will require manufacturers of products containing intentionally added PFAS to submit similar information on or before January 1, 2026. According to the Minnesota Pollution Control Agency (MPCA), it is working with the Interstate Chemicals Clearinghouse (IC2) to modify its High Priority Chemicals Data System (HPCDS) database as the reporting platform for its requirement. Maine had a similar reporting requirement in the statute enacted in 2021, but the governor signed a bill in April 2024 amending the statute so that the reporting requirement applies only to products that receive a CUU determination. More information on the 2024 amendments to Maine’s statute are available in our May 24, 2024, blog item.
Exemptions
New Mexico exempts several products from both the prohibition and reporting requirement. As stated earlier, Maine amended its reporting requirement to apply only to products with a CUU determination. Maine’s 2024 amendments included the addition of several exemptions to the statute as noted below. Minnesota’s statute has fewer exemptions, which are also noted below. The exemptions in New Mexico include:
A product for which federal law governs the presence of a PFAS in the product in a manner that preempts state authority (Maine);
Used products offered for sale or resale (Maine, Minnesota);
Medical devices or drugs and the packaging of the medical devices or drugs that are regulated by the U.S. Food and Drug Administration (FDA), including prosthetic and orthotic devices (Maine, Minnesota (reporting will still be required));
Cooling, heating, ventilation, air conditioning, or refrigeration equipment that contains intentionally added PFAS or refrigerants listed as acceptable, acceptable subject to use conditions, or acceptable to narrowed use limits by the U.S. Environmental Protection Agency (EPA) pursuant to the Significant New Alternatives Policy (SNAP) Program, 40 C.F.R. Part 82, Subpart G and sold, offered for sale, or distributed for sale for the use for which the refrigerant is listed pursuant to that program (Maine will prohibit these products on January 1, 2040);
A veterinary product and its packaging intended for use in or on animals, including diagnostic equipment or test kits and the veterinary product’s components and any product that is a veterinary medical device, drug, biologic, or parasiticide or that is otherwise used in a veterinary medical setting or in veterinary medical applications that are regulated by or under the jurisdiction of:
FDA;
The U.S. Department of Agriculture (USDA) pursuant to the federal Virus-Serum-Toxin Act; or
EPA pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), except that any such products approved by EPA pursuant to that law for aerial and land application are not exempt from this section (Maine);
A product developed or manufactured for the purpose of public health or environmental or water quality testing (Maine);
A motor vehicle or motor vehicle equipment regulated under a federal motor vehicle safety standard, as defined in 49 U.S.C. Section 30102(a)(10), except that the exemption does not apply to any textile article or refrigerant that is included in or as a component part of such products (Maine);
Any other motor vehicle, including an off-highway vehicle or a specialty motor vehicle, such as an all-terrain vehicle, a side-by-side vehicle, farm equipment, or a personal assistive mobility device (Maine);
A watercraft, an aircraft, a lighter-than-air aircraft or a seaplane (Maine);
A semiconductor, including semiconductors incorporated in electronic equipment, and materials used in the manufacture of semiconductors (Maine);
Non-consumer electronics and non-consumer laboratory equipment not ordinarily used for personal, family, or household purposes (Maine);
A product that contains intentionally added PFAS with uses that are currently listed as acceptable, acceptable subject to use conditions, or acceptable subject to narrowed use limits in EPA’s rules under the SNAP Program; provided that the product contains PFAS that are being used as substitutes for ozone-depleting substances under the conditions specified in the rules;
A product used for the generation, distribution, or storage of electricity;
Equipment directly used in the manufacture or development of the products listed above;
A product for which the NMED Environmental Improvement Board (EIB) has adopted a rule providing that the use of PFAS in that product is a CUU; or
A product that contains fluoropolymers consisting of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.
Testing Required and Certificate of Compliance
If NMED has reason to believe that a product containing an intentionally added PFAS is being sold, offered for sale, distributed, or distributed for sale, it may direct the manufacturer to provide it with testing results within 30 days that demonstrate the amount of each PFAS in the product, identified by its CAS RN and reported as an exact quantity or as falling within a range approved for reporting. If testing demonstrates that the product does not contain intentionally added PFAS, the manufacturer will provide NMED with a certificate of compliance attesting that the product does not contain an intentionally added PFAS, the testing results, and any other relevant information.
Minnesota has similar provisions regarding testing and certificates of compliance. The Maine Department of Environmental Protection (MDEP) may direct the manufacturer to provide within 30 days a certificate attesting that the product does not contain intentionally added PFAS.
Commentary
Although the requirements enacted by New Mexico, Maine, and Minnesota are similar, there are some key differences. Most of the products exempted in 2024 from Maine’s prohibitions are included in New Mexico’s statute, as well as a provision exempting fluoropolymers that “consist[] of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.” Bergeson & Campbell, P.C. (B&C) agrees that fluoropolymers should be distinguished from the broad class of PFAS. The exemption here may lead, however, to future litigation or amendment. The enacted definition includes the fluoropolymer polytetrafluoroethylene (PTFE), better known as TeflonTM. While New Mexico will ban cookware containing intentionally added PFAS, the best known example — Teflon-coated frying pans — will be exempt from both the prohibition and reporting requirements. Non-governmental organizations (NGO) may argue that legislatures lacking a chemical background did not appreciate that the exemption would extend to Teflon-coated cookware, while manufacturers will maintain the safety of fluoropolymers. The inclusion of the exemption is scientifically grounded and reflects the entirely sensible view that products posing no risk should not be banned. Other states are expected to follow New Mexico’s lead.
Each state varies in what reporting will be necessary. Maine dropped its broad reporting requirement and will require reporting only for products with a CUU determination. Minnesota will require reporting for all products, including those otherwise exempt from the prohibition requirements, including medical devices. New Mexico will require reporting only for products that do not have an exemption (thus excluding products that have a CUU determination and medical devices). Minnesota and New Mexico will require similar information, and with Minnesota’s reporting currently due on or before January 1, 2026, it may be that reporting to New Mexico will not be necessary since the enacted law allows NMED to grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may also accept information from a shared system as meeting the information requirements.
The testing envisioned by New Mexico and Minnesota that can demonstrate the amount of each PFAS in the product, identified by CAS RN and reported as an exact quantity or as falling within an approved range, all within 30 days, is beyond the current technical capabilities. With thousands of substances meeting the states’ definition of PFAS as “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom,” it is not yet possible to run a single test and determine the specific PFAS in a particular product. To date, the current test used, total organic fluorine (TOF), measures only the total amount of fluorine in a sample that is bound to organic compounds.
Since enacting its statute in 2021, Maine has amended it several times, and there are currently several bills in the Minnesota legislature that would amend its law. As reported in our April 11, 2025, blog item, the Maine Board of Environmental Protection (MBEP) approved MDEP’s December 2024 proposed rule regarding PFAS products during its April 7, 2025, meeting. Under the approved rule, CUU requests for products scheduled to be prohibited January 1, 2026, in Maine are due June 1, 2025. Although Minnesota requested comments in November 2024 on its planned PFAS in products reporting and fee rule, it has yet to issue a proposed rule, despite the rapidly approaching January 1, 2026, deadline. The state regulatory landscape remains fluid, and stakeholders are advised to stay tuned.
Texas Legislature Takes Steps to Extend and Expand Research and Development Credit
The 89th Texas legislative session—which runs from Jan. 14 through June 2—has been active. One of the most awaited items on the tax front is whether the state will extend and modify the Texas Research and Development Credit (R&D Credit), which is currently set to expire on Dec. 31, 2026.
Senate Bill 2206 and House Bill 4393
Sens. Paul Bettencourt, Joan Huffman, and Rep. Charlie Geren introduced Senate Bill 2206 and its house companion House Bill 4393 (together referred to as the R&D Bills) in March 2025. The Finance Committee unanimously approved Senate Bill 2206 on April 9 and the bill will now move to the full Senate for consideration. House Bill 4394 was referred to the Ways and Means Committee on April 1.
Per Sens. Bettencourt and Huffman’s analysis, the goal of Senate Bill 2206 is “to extend the franchise tax credit beyond the current Dec. 31, 2026, expiration date and to make the administration of the credit more efficient for both taxpayers and the Comptroller of Public Accounts of the State of Texas (comptroller) by adhering more closely to the federal R&D credit, thereby leveraging the work of the Internal Revenue Service and reducing the demand on resources of the comptroller.”
If passed, the R&D Bills would generally allow for the expiration of Texas’ current regime, instead creating a separate R&D Credit program via the new Subchapter T. Here is an overview of some of the most significant changes the R&D Bills would create:
Extension of the R&D Credit Beyond Dec. 31, 2026. The current version of the R&D Bills seeks to extend the credit beyond its current expiration date. Although the R&D Bills do not include a specific sunset date, they also do not specifically insure the program’s longevity. It is worth noting that the business industry advocated for specific assurances regarding the credit’s duration, arguing that strong economic investment in research and manufacturing would grow twofold by removing any tax advantage end date.
Repeal of the R&D Sales Tax Exemption. The current versions of the R&D Bills do not include a sales tax exemption, purporting to address administrative difficulties that have been experienced under the current regime. Under the existing R&D Credit, the sales tax and franchise tax credits are mutually exclusive, and taxpayers must choose either one or the other (i.e., a taxpayer many only take either (1) a sales and use tax exemption on the purchase, lease, rental, storage, or use of qualified research property, or (2) a franchise tax credit based on qualified research expenses). The R&D Bills would eliminate this choice, maintaining only the franchise tax credit.
Adherence to the Federal R&D Credit. The R&D Bills would also create a program that adheres more closely to the federal R&D credit. This is a significant change, which is intended to simplify administration of the R&D Credit in Texas. Currently, Texas’ R&D Credit uses a separate calculation that does not align with the federal R&D credit program.
Increase in Expenditures. Additionally, the R&D Bills propose increasing the taxpayer’s allowable research and development expenditures from 5% to 8.722% for franchise tax credit purposes. Generally, R&D programs in other states allow for research and development expenditures ranging between 5% to 27%.
GT Insights
A study by Rice University’s Baker Institute, published on March 13, found that a strong R&D Credit program may generate over 113,000 jobs in the state by 2035. Likewise, the study concluded that over $13 billion dollars may be generated with a strong program, including a total investment boost of 0.25% during the first year.
Business representatives have voiced their enthusiastic support that Texas continue to have a strong R&D Credit incentive program. Senate Bill 2206 and House Bill 4393 are first steps towards making that a reality by expanding the R&D Credit and avoiding its expiration.
Unwinding Executive Order 11246: What Federal Contractors Need to Know [Podcast]
In this podcast, shareholders Chris Near (Columbia) and Lauren Hicks (Indianapolis, Atlanta) discuss federal contractors’ and subcontractors’ obligations in unwinding Executive Order (EO) 11246, which mandates affirmative action programs for women and minorities. Lauren and Chris focus on the new administration’s EO 14173, the ongoing requirements for affirmative action programs for veterans and individuals with disabilities, and the necessary adjustments contractors must make to their policies, self-identification processes, and internal communications.
Georgia Governor Signs Bill to Strengthen Religious Exercise Protections, but Lawmakers Leave Anti-DEI Bill on the Table
On April 4, 2025, the final day of Georgia’s legislative session, Governor Brian Kemp signed into law a “religious liberty” bill that will strengthen protections for the free exercise of religion by prohibiting state and local government actions that substantially burden religious practices or activities. However, Georgia lawmakers left on the table a bill that would have prohibited state schools, colleges, and universities from promoting diversity, equity, and inclusion (DEI) despite advancing the legislation in the final days of the legislative session.
Quick Hits
Senate Bill 36, known as the Georgia Religious Freedom Restoration Act, aims to protect the free exercise of religion by imposing a “compelling interest” test for government actions that may burden religious practices.
The bill has significant implications for Georgia schools, including state higher education institutions, as Georgia lawmakers seek to align the state with broader federal policies pushed by the Trump administration.
Despite being advanced by the Georgia Senate, House Bill 127, which seeks to ban DEI programs at state colleges and universities, ultimately did not pass the House on the final day of the session.
SB 26—Georgia Religious Freedom Restoration Act
Governor Kemp signed Senate Bill (SB) 36, known as the “Georgia Religious Freedom Restoration Act,” a day after lawmakers sent the bill for signature on April 3, 2025. The law will enshrine the “compelling interest” test for determining whether actions of the Georgia state and local governments unconstitutionally burden the free exercise of religion.
The bill is modeled on the former federal Religious Freedom Restoration Act of 1993 (RFRA) which the Supreme Court of the United States in 1997 struck down as applicable to states.
Georgia’s SB 36 will prohibit the state and local governments from “substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability.” Such laws will only be upheld if the government demonstrates: (1) the action furthers “a compelling governmental interest” and (2) is the “least restrictive means of furthering such compelling governmental interest.”
The bill will enable an individual whose religious exercise is burdened to file a claim against the government or use it as a defense in a judicial proceeding and obtain reasonable attorneys’ fees and costs.
Notably, SB 36 will apply to “any branch, department, agency, instrumentality, and official or other person acting under color of law of this state, or any political subdivision” defined by state law, including local governments and school boards. The law may further apply to actions by state colleges and universities as Georgia courts have recognized the Board of Regents of the University System of Georgia to be a state agency or subdivision.
Proponents of the bill argued that it would protect the free exercise of religion from intrusions by federal, state, and local governments. However, opponents have argued that more religious exercise protections are unnecessary as it could lead to discrimination against LGBTQ+ people and religious minorities. More than half of states have RFRA-like protections.
In other states with similar RFRA laws, students and parents have sued colleges and universities due to various rules and regulations that govern student life. In addition, the law provides an additional avenue for employees to sue if they believe that their religious freedom is being infringed upon. Local and state governments, including public colleges and universities, may want to consider conducting a privileged review of existing laws, rules, and policies that may run afoul of the law and also consider narrowly tailoring any new actions that may face scrutiny.
HB 127—DEI Ban
In the final week of the legislative session, the Georgia Legislature advanced but ultimately did not pass House Bill (HB) 127, which would have banned a wide range of DEI programs and initiatives in Georgia’s public schools, colleges, and universities. The legislation follows President Donald Trump’s recent executive orders to eliminate “illegal” DEI programs and initiatives.
The bill would have prohibited all public schools and state colleges and universities from “promot[ing], support[ing], or maintain[ing] any programs or activities that advocate for diversity, equity, and inclusion.” Such prohibited programs under the bill would include efforts to promote:
“different treatment of, or provide special benefits to, individuals on the basis” of protected classes or characteristics;
“policies and procedures designed or implemented with reference” to protected classes or characteristics;
“training, programming, recruitment, retention, or activities” that provide “preferential treatment of any race, color, sex, ethnicity, national origin, gender identity, or sexual orientation over another”; and
“training, programming, or activities designed or implemented with reference to race, color, ethnicity, gender identity, or sexual orientation.”
Specifically, state colleges and universities would be prohibited from taking official positions on any “widely contested opinion referencing” a range of topics or principles around race and gender, including “unconscious or implicit bias,” “cultural appropriation,” “allyship,” “gender ideology or theory,” “microaggressions,” “group marginalization,” “Antiracism,” “systemic oppression,” “social justice,” “intersectionality,” “neopronouns,” “heteronormativity,” “disparate impact,” and racial or sexual privilege.
State schools and colleges that violated the bill could have been stripped of state funding or state-administered federal funding. However, the bill would not have applied to interscholastic and intercollegiate athletics programs or “to the design, designation, or use of a multiple occupancy restroom or changing area.”
Although the bill ultimately failed to pass, higher education institutions, as well as K-12 schools, may want to consider conducting a privileged review of all diversity, equity, and inclusion programs, given that the bill may be revived during a subsequent session. Further, the Trump administration has issued similar guidance to all schools that receive federal funding. Thus, many Georgia schools are already under scrutiny for diversity, equity, and inclusion programs and likely will remain so for the immediate future.
McDermott+ Check-Up: April 11, 2025
THIS WEEK’S DOSE
House Passes Concurrent Budget Resolution for Reconciliation Process. Passage of the resolution didn’t resolve the policy differences between the House and the Senate. Those still need to be addressed as the reconciliation package is developed.
House Ways and Means Health Subcommittee Discusses Lowering Costs of Biosimilars. Witnesses included physicians and biosimilar manufacturers, and members discussed their views on the biosimilar market.
House Oversight Committee Examines FDA Reform. Democrats criticized the Trump administration’s restructuring of the US Food and Drug Administration (FDA), while Republicans pushed for further FDA reform.
CMS Releases Two MA Final Rules. The regulations increase plan payments for 2026 but omit several significant proposals.
Trump Administration Takes Further Deregulation Actions. The administration directed federal agencies to repeal, without notice and comment, regulations that do not comply with Loper Bright, and sought public comment on which regulations to repeal.
CMS Notifies States of Intent to Deny Future Funding of DSHPs and DSIPs. The Centers for Medicare & Medicaid Services (CMS) believes providing federal funding for designated state health programs (DSHP) and designated state investment programs (DSIP) is not in line with the mission of Medicaid.
Federal Judge Strikes Down Biden-Era Nursing Home Staffing Rule. The ruling could impact ongoing reconciliation discussions as Republicans look for policies that would save money.
Supreme Court, Fourth Circuit Rule on Firing of Probationary Workers. Both rulings held that the plaintiffs lacked legal standing to bring the cases.
CONGRESS
House Passes Concurrent Budget Resolution for Reconciliation Process. Over the weekend, the Senate passed the concurrent budget resolution by a 51 – 48 vote, with Sens. Paul (R-KY) and Collins (R-ME) joining Democrats in voting no. The resolution includes differing instructions for House and Senate committees, requiring the committees to continue debating spending and savings levels. Democrats introduced 800 amendments, including a bipartisan amendment from Sens. Wyden (D-OR) and Hawley (R-MO) to strike instructions for the House Energy and Commerce Committee to find at least $880 billion in savings, likely to come from Medicaid. The amendment failed, but Sens. Collins, Hawley, and Murkowski (R-AK) voted with Democrats in support.
House Republican leadership’s plan to pass the resolution before leaving for the two-week Easter recess was complicated by opposition from multiple members of the party, including House Budget Committee Chairman Arrington (R-TX). Those members were opposed to separate spending cut instructions for the House and Senate, as they wanted to stick with the House’s version of a budget resolution, which called for at least $1.5 trillion in federal spending cuts. Leadership repeatedly postponed a Rules Committee meeting to discuss the resolution, and President Trump met with House Republicans to urge them to support the concurrent resolution. Ultimately, a vote on the concurrent resolution was brought to the House floor Wednesday night but was cancelled amid strong opposition.
Senate Majority Leader Thune (R-SD) stated on Thursday that the Senate is “aligned with the House . . . in terms of savings,” noting that some senators believe the $1.5 trillion threshold is a minimum and that the Senate will “do everything we can to be as aggressive as possible to see that we are serious about the matter.” While this still leaves wiggle room as reconciliation continues, the House passed the resolution by a 216 – 214 vote. Reps. Spartz (R-IN) and Massie (R-KY) were the only Republicans to oppose it. As the vote was happening, Senate Democrats issued a letter to the public criticizing the budget resolution, arguing that it would provide a tax cut for the wealthy while cutting Medicaid. In related news, the Congressional Budget Office (CBO), in response to a request from Sen. Merkley (D-OR), released a report showing that if the Trump-era tax cuts were made permanent, the federal deficit would increase by $6 trillion over the next 10 years.
House Ways and Means Health Subcommittee Discusses Lowering Costs of Biosimilars. During the hearing, Democrats continued to express their concerns about National Institutes of Health grant reductions and the US Department of Health and Human Services (HHS) reorganization and reductions in force. Democrats were concerned about the implications of these actions for biosimilar market research and approvals. Republicans discussed disincentives and barriers to the development of new life-saving drugs, as well as issues with the current reimbursement system in Medicare and the role of pharmacy benefit managers (PBMs) in the biosimilar market. Witnesses included physicians and biosimilar manufacturers who discussed the importance of biosimilars and threats to a healthy biosimilar market, including actions from insurance companies and PBMs, cuts to federal research grants, and federal regulations.
House Oversight Committee Examines FDA Reform. Republicans in the hearing expressed the need for FDA reform, while Democrats criticized the Trump administration’s current efforts to restructure the agency. Members from both parties emphasized that relying on foreign countries for drug manufacturing poses dangers to the domestic supply chain. Witnesses provided suggestions for how to improve FDA product review and regulation of products such as hemp, e-cigarettes, and anti-obesity medications.
ADMINISTRATION
CMS Releases Two MA Final Rules. CMS released the Medicare Advantage (MA) and Part D contract year 2026 policy and technical changes final rule late on April 4, 2024. The Biden administration had issued the proposed rule in November 2024. CMS did not finalize proposals from the Biden administration to expand coverage of anti-obesity medications in Medicare and Medicaid, modify health equity policies, or increase guardrails on artificial intelligence. CMS noted that it may consider future rulemaking on these issues. Read the fact sheet here.
On April 7, 2024, CMS released the 2026 MA capitation rates and Part C and D payment policies, known as the final rate announcement. Released on an annual basis, the rate announcement is used to calculate MA plan payments and includes other payment policies that impact Part D. CMS projects that the payment policies and updates in the final rate announcement will result in a net 5.06% increase in payments to MA plans in 2026. This percentage is an increase from the advance notice, which proposed a 2.23% increase. After accounting for expected trends in coding, CMS projects a net payment increase of 7.16%. This projection is an average across the industry and will vary for each plan. Read the press release here and the fact sheet here.
Trump Administration Takes Further Deregulation Actions. The Office of Management and Budget (OMB) issued a Deregulation Request for Information (RFI) asking for suggestions for rules and regulations that can be rescinded that are unnecessary, unlawful, or unduly burdensome, along with reasons to support the rescission. OMB particularly seeks information on regulations that are inconsistent with statute, unconstitutional, or have costs that exceed benefits. Comments are due May 11, 2025. This follows the January 2025 executive order (EO) “Unleashing Prosperity Through Deregulation,” which states that the Trump administration will repeal 10 regulations for every new regulation issued.
President Trump also sent a memo to federal agencies in follow-up to the February 2025 EO “Ensuring Lawful Governance and Implementing the President’s Deregulatory Initiative,” which directed agencies to identify unlawful and potentially unlawful regulations and begin efforts to repeal them by mid-April. The memo directs federal agencies to prioritize repeal of regulations that do not comply with various US Supreme Court decisions, including Loper Bright. The memo directs agencies to take such actions without notice and comment where doing so is in line with the “good cause” exception of the Administrative Procedure Act. That means that rules could begin being rescinded without any public input as soon as April 19, 2025.
On April 9, 2025, President Trump issued a new EO, “Reducing Anti-Competitive Regulatory Barriers,” which directs agencies to identify regulations that create monopolies, impose unnecessary barriers to market entry, or limit competition, and to recommend recission or modification. The EO also directs the Federal Trade Commission to issue an RFI within 10 days seeking public input on anticompetitive regulations, and to create within 90 days a list of anticompetitive regulations to be rescinded or modified.
CMS Notifies States of Intent to Deny Future Funding of DSHPs and DSIPs. In a State Medicaid Director Letter, CMS notes it will not approve new requests or extend existing requests for federal matching funds for Section 1115 waivers that authorize DSHPs and DSIPs. The letter notes that CMS takes issue with federal matching funds being provided to support DSHP and DSIP which have not necessarily been tied directly to services provided to Medicaid beneficiaries, unlike traditional Medicaid matching funds. Specific examples cited include funding housekeeping for individuals not eligible for Medicaid and internet for rural providers. CMS notes it will conduct direct outreach to states with existing DSHP and DSIP authority to emphasize that it will not be extended beyond the currently approved period. Read the press release here.
COURTS
Federal Judge Strikes Down Biden-Era Nursing Home Staffing Rule. A US District Court for the Northern District of Texas judge ruled that the Biden administration’s CMS exceeded its authority when issuing the regulation, citing the Supreme Court’s Loper Bright decision. The final rule in question required nursing homes to have a registered nurse onsite 24 hours a day, seven days a week, and to implement a nurse staffing standard so that each resident received 3.48 hours of nursing care per day. Plaintiffs argued that the staffing mandate would close nursing homes because they face workforce shortages. Repealing the regulation through congressional action would save an estimated $22 billion, and House Republicans have considered it as a cost-saver in the budget reconciliation process. It is unclear if the Trump administration will appeal the court’s decision and how it might impact Congress’ ability to capture those savings for reconciliation.
Supreme Court, Fourth Circuit Rule on Firing of Probationary Workers. The Supreme Court’s ruled, in a case brought by multiple nonprofits, that the nonprofits lacked legal standing to sue over the firing of probationary employees at the US Departments of Defense, Treasury, Energy, Interior, Agriculture, and Veterans Affairs. In a separate case, the US Court of Appeals for the Fourth Circuit ruled that the plaintiff states lacked legal standing to sue against firings at 18 federal agencies, including HHS. The Fourth Circuit’s decision overrules a lower court’s decision this month that the agencies must reinstate fired probationary employees in plaintiff states.
QUICK HITS
HHS Secretary Kennedy Visits Southwestern States in MAHA Tour. The Make America Healthy Again (MAHA) tour made stops in Utah, Arizona, and New Mexico, where Secretary Kennedy met with state, tribal, and local leaders about their initiatives to improve nutrition and food supply, reform the Supplemental Nutrition Assistance Program, and ban fluoride in drinking water.
Trump Pauses Tariffs, Signals Potential Pharmaceutical Tariffs. President Trump announced a 90-day pause on his administration’s reciprocal tariffs for all countries, except China, which will now be subject to a 145% tariff. Although pharmaceuticals were exempt from the original tariff policy, President Trump indicated that they may soon be subject to a separate tariff. Twenty-six Democratic representatives sent a letter to the administration expressing concern about the impact of tariffs on the medical supply chain.
HHS Secretary Kennedy Publishes Op-Ed Defending HHS Reforms. In the New York Post opinion article, he discusses the Trump administration’s goal of addressing chronic diseases and outlines the HHS restructuring announced in March.
CMS Administrator Oz Publishes Vision for the Agency. The vision notes CMS will implement President Trump’s EO on healthcare transparency, reduce unnecessary paperwork for providers, eliminate fraud, waste, and abuse, and focus on chronic disease prevention and management.
MedPAC Holds Final Meeting of 2024 – 2025 Cycle. The Medicare Payment Advisory Commission (MedPAC) meeting included a vote on a draft recommendation to reform and improve the physician fee schedule. Additional sessions focused on Part D plans, MA supplemental benefits, rural hospitals, software technologies, hospice services, and nursing home quality.
MACPAC Holds Final Meeting of 2024 – 2025 Cycle. The Medicaid and CHIP Payment and Access Commission (MACPAC) meeting included a vote on recommendations for the June 2025 report to Congress, along with sessions focused on home- and community-based services, substance use disorder and mental health, artificial intelligence in prior authorization, Medicare-Medicaid plans, and children’s healthcare.
GAO Releases Report on Drug Shortages. The US Government Accountability Office (GAO) report describes trends in drug shortages since the COVID-19 pandemic and includes two recommendations for HHS to improve its coordination of drug shortage activities across agencies.
Senate Homeland Security and Governmental Affairs Committee Advances OPM Director Nomination. Scott Kupor’s nomination for director of the Office of Personnel Management (OPM) advanced to the full Senate floor by a party-line vote of 7 – 4.
House Energy and Commerce Democrats Send Letter on HHS Hire. Ranking Member Pallone (D-NJ), Health Subcommittee Ranking Member DeGette (D-CO), and Oversight and Investigations Subcommittee Ranking Member Clarke (D-NY) posed seven questions to HHS and expressed concern about the hiring of David Geier to lead a study on the link between vaccines and autism.
NEXT WEEK’S DIAGNOSIS
The first series of proposed Medicare payment regulations are expected soon, including the Inpatient Prospective Payment System proposed rule. Both chambers have left town for the annual Easter and Passover recess and are scheduled to return on April 28, 2025. The M+ Check-Up will be on hiatus next week and will return April 25, 2025, to recap the two-week recess.
All-Points Bulletin for Defense Contractors: If You’re 15% Behind Schedule or 15% Over Budget, You Need a Strategy
On April 9, 2025, President Trump signed an Executive Order (“EO”) titled Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base. This EO seeks to overhaul many aspects of defense acquisition in order to enhance the military capabilities and streamline the Department of Defense’s (“DOD”) procurement processes. While every presidential administration seeks to streamline and facilitate defense procurement, this EO contains noteworthy approaches that defense contractors should be aware of. For instance, the EO suggests that the government has an appetite for “risk” when it comes to DOD procurements: “We will also modernize the duties and composition of the defense acquisition workforce, as well as incentivize and reward risk-taking and innovation from these personnel.”
Who Does the EO Apply To?
The EO is directed at the DOD and its various branches, including the Army, Navy, and Air Force. But it will potentially have considerable impacts on defense contractors, particularly those who are behind schedule or over budget.
What Are the Key Provisions of the EO?
The EO is focused on making DOD acquisitions speedier from start to finish. Accordingly, the EO directs the Secretary of Defense to utilize existing authorities to expedite acquisitions and to “require” a general preference for commercial solutions and Other Transactions Authority for “all” DOD contracting actions.
The EO requires a detailed review of each functional support role within the acquisition workforce to eliminate unnecessary tasks and centralize decision-making.
The EO requires DOD to establish a Configuration Steering Board to manage risk across all acquisition programs.
The EO requires that that DOD eliminate 10 existing regulations for every new one proposed.
The EO requires creating performance evaluation metrics for acquisition workforce members that incentivize them to look first to commercial solutions and adaptive acquisition pathways. The EO also contemplates that acquisition personnel should “in good faith, utilize innovative acquisition authorities and take measured and calculated risks.” The EO also requires assessing whether the acquisition workforce is rightsized.
The EO requires the establishment of field training teams to provide hands-on guidance and assistance to acquisition personnel in implementing innovative acquisition authorities.
Most notably for DOD contractors, the EO requires a review of all major defense acquisition programs (“MDAPs”) to identify those that are more than 15 percent behind schedule or more than 15 percent over cost so that such programs can be considered for cancellation.
In fact, the EO requires Secretary Hegseth to submit a list of all MDAPs contracts, along with information about performance against original and approved government cost estimates, to the Director of the Office of Management and Budget for review within 90 days from the date of the EO (i.e., July 8, 2025).
What Should Defense Contractors Do?
DOD contractors should be prepared to make a persuasive case as to the value and criticality they deliver, in order to protect their work from possible termination.
If a DOD contractor’s performance is behind schedule or over budget, the contractor should develop a plan to address these issues promptly to its customer’s satisfaction and with its customer’s buy-in.
DOD contractors should develop a sophisticated understanding of Other Transactions Authority, the Rapid Capabilities Office, rapid commercial solutions, and other ways by which the government could seek to accelerate the pace of DOD acquisitions.
Relatedly, to the extent the government begins to view bid protests as a cog in the wheel of speedy defense procurements, DOD contractors should prepare for a future characterized by new or increased barriers to bid protest review. DOD contractors should make sure they are getting the most out of things like Industry Days, Requests for Information, solicitation Q&As, and bringing their very best efforts to final proposal revisions.
This EO represents the start of what may be a significant shift in defense acquisition policy. Blank Rome is continuing to monitor breaking developments in this space.
State Climate Disclosure Bills – A Growing Trend?
With the uncertainty plaguing the ultimate status of the SEC’s climate disclosure rules on the federal level (we reported on the most recent developments in The SEC Votes to “End its Defense” of Climate Change Rules and SEC Asks Court to Put Climate Change Litigation on Hold), a number of U.S. states have continued to take up the mantle to mandate the disclosure of climate emissions from both public and private enterprises.
California was the first state to pass climate disclosure laws (discussed in previous client alerts – California – First State to Enact Climate Reporting Legislation and California Climate Disclosure Laws – New Developments, Old Timelines) and several states have since proposed similar bills requiring large business entities to disclose their greenhouse gas (GHG) emissions, the highlights of which are summarized below.
However, on April 8, 2025, President Trump issued an Executive Order directing the U.S. Attorney General to identify and stop the enforcement of all state laws, regulations, policies and practices “that are or may be unconstitutional, preempted by Federal law, or otherwise unenforceable,” with a focus on prioritizing any such state laws purporting to address “climate change” or involving “greenhouse gas.”
While it remains unclear whether any of the proposed state bills will pass into law in their current form, or at all, or if enacted, how they will be treated by the current Administration, the trend is noteworthy, and the regulated community should keep informed regarding the status of the proposed state bills.
I. New York
1. Senate Bill 3456 ‑ The Climate Corporate Data Accountability Act[1]
Initially introduced in 2023 and reintroduced in the New York Senate in January 2025 as S3456, the Climate Corporate Data Accountability Act mandates reporting by entities meeting the following criteria:
U.S.‑formed entities;
Doing business in the State of New York and deriving receipts from activity in the State;[2] and
Having revenues in the preceding fiscal year exceeding $1 billion, including revenues received by all of the business entity’s subsidiaries that do business in the State.
Reporting entities would be required to disclose their Scope 1, 2 and 3 GHG emissions annually to an emissions reporting organization. The disclosure timing differs from the California law in that disclosure on a reporting entity’s Scope 1 and 2 emissions would be required a year later, beginning in 2027 (for 2026 data), and on Scope 3 emissions beginning in 2028 (instead of 2027). As in California, GHG emissions would need to be measured and reported using the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development (the GHG Protocol).
The New York State Department of Environmental Conservation would be required to adopt implementing regulations by the end of 2026.
The Senate Environmental Conservation Committee recently voted unanimously in favor of the bill which is now pending in the Senate Finance Committee.
2. Senate Bill 3697 – Climate‑Related Financial Risk Reporting[3]
Introduced in January 2025, this bill is modeled on California’s Climate‑Related Financial Risk Reporting law (SB 261). The New York bill would require business entities formed under U.S. law with total annual revenues exceeding $500 million in its prior fiscal year and that do business in New York to prepare a climate‑related financial risk report disclosing, on its website, by January 1, 2028 and biennially thereafter: (i) its climate‑related financial risk, in accordance with the Task Force on Climate‑Related Financial Disclosures framework or an equivalent reporting requirement; and (ii) the measures it adopted to reduce and adapt to the disclosed climate‑related financial risk.
As in California, reports could be consolidated at the parent entity level. Administrative penalties for non‑disclosure or for inadequate disclosure could be imposed up to a cap of $50K per reporting year.
The bill is currently with the Senate Environmental Conservation Committee.
The NY bills overlap with California’s climate disclosure laws (SB 253 and SB 261) and, if adopted as drafted, should not impose material additional obligations on entities already subject to the California laws.
II. New Jersey – Senate Bill 4117[4]
S4117 (the “Climate Corporate Data Accountability Act”) was introduced in 2025. The bill would require businesses operating in New Jersey with an annual revenue exceeding $1 billion to provide a report on their GHG emissions to the Department of Environmental Protection (DEP) and a nonprofit organization selected by the DEP annually, commencing three years after the bill’s enactment; publicly disclose their Scope 1 and Scope 2 GHG emissions commencing four years after the bill’s enactment; and publicly disclose their Scope 3 GHG emissions five years after the bill’s enactment. As in California, GHG emissions would need to be measured and reported using the GHG Protocol.
Importantly, to ease compliance, the bill expressly would allow reporting entities to use reports they provide to the California state government under California’s “Climate Corporate Data Accountability Act” (SB 253) to satisfy the provisions of the New York bill. Business entities that violate the bill’s provisions would be liable for civil administrative penalties of up to $10,000 for the first offense, $20,000 for the second offense and $50,000 for the third and each subsequent offense. A reporting entity could also be liable for civil penalties of up to $10,000 per day of violation.
The bill is currently pending in the Senate Budget and Appropriations Committee.
III. Illinois House Bill 3673[5]
Introduced in the Illinois House in 2025, HB673 (the “Climate Corporate Accountability Act”) would require U.S. business entities doing business in the state of Illinois, with revenues exceeding $1 billion, to annually disclose their Scope 1, 2 and 3 GHG emissions. These public reporting requirements would commence on January 1, 2027 for Scope 1 and 2 emissions and no later than 180 days thereafter for Scope 3 emissions. The Secretary of State would be required to develop and adopt relevant rulemaking before July 1, 2026. As in California, the emissions would need to be calculated using the GHG Protocol.
The bill references the Attorney General’s right to bring a civil action to seek civil penalties but does not contain any specific penalties for non‑compliance.
The bill is currently pending in the House Rules Committee.
IV. Washington – Senate Bill 6092[6]
E2SSB 6092 was introduced in the Washington Senate in 2024. This bill initially required business entities with over $1 billion in annual revenue and doing business in Washington to report Scope 1, 2 and 3 GHG emissions. However, the bill was later substituted to instead direct the Washington Department of Ecology to develop policy recommendations to address climate‑related disclosure requirements in the State.
The Washington Senate passed the bill in February 2024 and the bill is currently with the House.
V. Colorado – House Bill 25‑1119[7]
Introduced in January 2025, HB25‑1119 would require entities doing business in Colorado and having total revenues exceeding $1 billion to disclose annually their Scope 1 and 2 emissions beginning in 2028, and certain Scope 3 emissions by 2029, with a phased‑in approach in subsequent years based on the source of those Scope 3 emissions.[8]
Interestingly, HB25‑1119 includes a freedom of speech exception noting that reporting entities would not be required to disclose any information in violation of their freedom of speech, including any freedom from compelled speech, guaranteed by the First Amendment to the U.S. Constitution or the Colorado State Constitution.
However, this bill has been postponed indefinitely by the House Committee on Energy & Environment.
* * *
The intent of the state bills on climate disclosure is in line with the global trend toward mandated climate reporting, although the specifics of what needs to be disclosed, by whom and when, continue to evolve both domestically and globally. For example, the timing for certain required climate‑related disclosures in the European Union has recently been delayed, as reported in our client alerts (A Step Closer to CSRD’s Non‑EU Group Reporting Standards and Momentum on Voting on the Omnibus Delay and Updating Corporate Sustainability Reporting Requirements), while President Trump’s recent Executive Order calls into question the viability of U.S. state climate disclosure laws.
We will continue to update you on climate disclosure legislative developments on the state, federal and international fronts.
[1] https://legislation.nysenate.gov/pdf/bills/2025/S3456
[2] Within the meaning of Section 209 of the New York Tax Law.
[3] https://legislation.nysenate.gov/pdf/bills/2025/S3697
[4] https://legiscan.com/NJ/text/S4117/2024
[5] https://www.ilga.gov/legislation/104/HB/PDF/10400HB3673lv.pdf
[6] https://lawfilesext.leg.wa.gov/biennium/2023‑24/Pdf/Bills/Senate%20Bills/6092‑S2.E.pdf?q=20250331132001
[7] https://leg.colorado.gov/sites/default/files/documents/2025A/bills/2025a_1119_01.pdf
[8] Scope 3 emissions from purchased goods and services, capital goods and the use of sold products would need to be reported by January 1, 2029; from fuel and energy activities (not already classified as Scope 1 or 2 emissions), waste generated in operations, processing of sold products and end‑of‑life of sold products by January 1, 2030; and upstream and downstream transportation and distribution, business travel, employee commuting, upstream leased assets and franchises by January 1, 2031.
The Clock is Ticking for Republicans to Use the Congressional Review Act
Congress has approximately one month to use the Congressional Review Act (CRA) to undo qualifying Biden Administration-issued regulations. According to an updated analysis by Bloomberg Government, the estimated period to expedite repeal of Biden Administration rules ends May 8, 2025. This gives Congress approximately four weeks to act on the dozens of pending CRA bills.
President Trump’s focus on overturning Biden Administration regulations through the CRA has taken a back seat of late to other issues. Attention has turned to tariffs and congressional Republicans’ efforts to reach agreement on a budget framework. Focus is especially needed on developing a framework as it will lay the foundation for consideration of other Trump priorities, including extending the 2017 tax cuts. It will take weeks, if not months, to develop budget reconciliation legislation. With the just-announced 90-day pause in implementing most tariffs, the most immediate Trump priority now remaining is using the CRA to repeal Biden Administration rules deemed overly burdensome, and the deadline of May 8, 2025, will be upon us soon. (Details about how the CRA works can be found in our February 27, 2025, blog post.)
To date, only two resolutions of disapproval have been enacted in the 119th Congress:
H. J. Res. 35 — This joint resolution nullifies the Environmental Protection Agency (EPA) rule titled Waste Emissions Charge for Petroleum and Natural Gas Systems: Procedures for Facilitating Compliance, Including Netting and Exemptions and published on November 18, 2024. The rule outlines compliance requirements under the Methane Emissions Reduction Program. Under the program, the EPA collects an annual charge on emissions of methane and other greenhouse gases from the oil and gas sector if the emissions exceed specified waste emissions thresholds.
S. J. Res 11 — This joint resolution nullifies the final rule issued by the Bureau of Ocean Energy Management (BOEM) titled Protection of Marine Archaeological Resources and published on September 3, 2024. The rule requires operators and lessees conducting oil and gas exploration or development on the Outer Continental Shelf and that are seeking BOEM approval for such activities to also provide BOEM with an archaeological report for the area of potential effects. The report must identify potential archaeological resources (material remains of human life or activities that are at least 50 years old and that are of archaeological interest) on the sea floor. The rule modified regulations that only required such a report when a BOEM regional director has reason to believe that an archaeological resource may be present in the lease area.
Two more resolutions of disapproval have been passed by both the Senate and House of Representatives and await signature by President Trump:
H. J. Res 24 — This joint resolution nullifies the rule titled Energy Conservation Program: Energy Conservation Standards for Walk-In Coolers and Walk-In Freezers and submitted by the Department of Energy (DOE) on December 23, 2024. Under the rule, DOE adopted amended energy conservation standards for walk-in coolers and freezers to achieve the maximum improvement in energy efficiency that DOE determined was technologically feasible and economically justified.
H. J. Res. 25— This joint resolution nullifies the rule titled Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales and issued by the Internal Revenue Service (IRS) on December 30, 2024. The rule generally requires persons effectuating decentralized financial (DeFi) transactions to report certain information regarding digital asset sales to the IRS.
At least six other resolutions of disapproval have been passed by either the Senate or House of Representatives. Four of the six resolutions of disapproval, summarized below, address regulations promulgated by EPA and DOE (the remaining two address regulations by the Consumer Financial Protection Bureau):
H. J. Res. 61 — This joint resolution nullifies the Environmental Protection Agency rule titled National Emission Standards for Hazardous Air Pollutants: Rubber Tire Manufacturing (89 Fed. Reg. 94886) and published on November 29, 2024. The rule addresses the decision in Louisiana Environmental Action Network v. EPA (D.C. Cir. 2020) by implementing emissions standards for the rubber processing subcategory of the rubber tire manufacturing industry to ensure all emissions of hazardous air pollutants from sources in the source category are regulated.
H. J. Res. 20 — This joint resolution nullifies the rule titled Energy Conservation Program: Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters and submitted by the Department of Energy (DOE) on December 26, 2024. Under the rule, DOE adopted amended energy conservation standards for gas-fired instantaneous water heaters to achieve the maximum improvement in energy efficiency that DOE determined was technologically feasible and economically justified.
H. J. Res. 42 — This joint resolution nullifies the Energy Conservation Program for Appliance Standards: Certification Requirements, Labeling Requirements, and Enforcement Provisions for Certain Consumer Products and Commercial Equipment rule published by the Department of Energy (DOE) on October 9, 2024. Under the rule, DOE modified its regulations on the energy efficiency of certain types of consumer products (e.g., washing machines and dishwashers) and industrial equipment (e.g., computer room air conditioners). Specifically, it modified certification requirements, labeling requirements, and enforcement provisions for these products and equipment to (1) align reporting requirements with currently applicable energy conservation standards and test procedures, and (2) provide DOE with the information necessary to determine the appropriate classification of products for the application of standards.
H. J. Res. 75 — This joint resolution nullifies the final rule issued by the Department of Energy’s Office of Energy Efficiency and Renewable Energy titled Energy Conservation Program: Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers and published on January 21, 2025. Under the rule, the office adopted new and amended energy conservation standards for commercial refrigeration equipment in order to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified.
With Congress scheduled to take a two-week recess beginning April 11, 2025, Congress will have approximately two weeks to address remaining resolutions of disapproval under an expedited process that requires only a majority vote. With Democrats unlikely to support Republican efforts to overturn regulations from a Democratic administration, the deadline for Republicans to act is essentially the deadline for expedited action under the CRA.
Given the remaining time and considering other issues that will demand congressional attention in the coming month, congressional Republicans will be challenged to equal the mark of 16 successful CRA actions in President Trump’s first term.
As noted in our February 27, 2025, blog post, at least 16 resolutions of disapproval that have been introduced address rules promulgated by EPA. Four of these relate to the Toxic Substances Control Act (TSCA), including three (essentially the same) regarding trichloroethylene (TCE). The other resolution of disapproval is regarding decabromodiphenyl ether (decaBDE) and phenol, isopropylated phosphate (3:1) (PIP 3:1), “Revision to the Regulation of Persistent, Bioaccumulative, and Toxic Chemicals Under the Toxic Substances Control Act (TSCA)” (89 Fed. Reg. 91486. As there will be limited time for Congress to act, and with other, more easily explained resolutions of disapproval available, these TSCA-related resolutions of disapproval will face an uphill battle to be considered, let alone enacted, in the limited time remaining.
Justice Department Issues Memorandum Realigning DOJ’s Crypto Enforcement Efforts
On April 7, 2025, U.S. Deputy Attorney General Todd Blanche issued a memorandum titled “Ending Regulation by Prosecution” (Blanche Memo), outlining a new Department of Justice approach to digital asset enforcement. The Blanche Memo discusses the DOJ’s intent to focus its prosecutorial efforts away from crypto intermediaries and instead targeting “individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.” Further, the Blanche Memo emphasizes that “[t]he digital assets industry is critical to the Nation’s economic development and innovation,” and the memorandum is being issued pursuant to President Trump’s directive to “end the regulatory weaponization against digital assets.”
Background
A brief review of the DOJ’s recent crypto strategy provides background and context to the Blanche Memo. Under the Biden administration, the federal government expanded its prosecutorial activity in the digital asset space. As part of that activity, the DOJ established the National Cryptocurrency Enforcement Team (NCET) and the White House announced what it called the “First-Ever Comprehensive Framework For Responsible Development of Digital Assets.” The Biden DOJ brought multiple prosecutions targeting intermediaries, such as crypto exchanges. As an example, the DOJ charged HDR Global Trading Limited, also known as “BitMEX,” with Bank Secrecy Act violations after BitMEX allegedly: (i) provided cryptocurrency trading services to U.S. customers after claiming it had withdrawn from the U.S. market to avoid being subject to U.S. regulations; and (ii) failed to implement and maintain adequate anti-money laundering and KYC programs.1 Similarly, in 2023, the Justice Department charged the founders of Tornado Cash, a well-known cryptocurrency mixer, with money laundering and related offenses. The SEC and CFTC have also pursued several enforcement actions against exchanges and token issuers in recent years2
The Blanche Memo
The Blanche Memo declares that the DOJ “is not a digital assets regulator” and is ending “regulation by prosecution in this space.” As outlined in the Blanche Memo, the Justice Department plans to focus on digital asset investigations and prosecutions targeting “conduct victimizing investors, including embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts.” The Blanche Memo emphasizes that enhanced focus will be placed—in accordance with the “total elimination” policy described in Executive Order 14157—on cases involving cartels, transnational criminal organizations, foreign terrorist organizations, and specially designated global terrorists, which have “increasingly turned to digital assets to fund their operations and launder the proceeds of their illicit businesses.” Specifically, the Blanche Memo notes that “[a]s part of the Justice Department’s ongoing work against fentanyl trafficking, terrorism, cartels, and human trafficking and smuggling, the [DOJ] will pursue the illicit financing of these enterprises by the individuals and enterprises themselves, including when it involves digital assets, but will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.” Indeed, the Blanche Memo notes that virtual currency exchanges, mixing and tumbling services, and offline wallet providers will not be targeted based on bad acts committed by “end users” or for “unwitting violations of regulations.”
In accordance with the above priorities, the Blanche Memo concludes by stating that “[o]ngoing investigations that are inconsistent with the foregoing should be closed.” And pursuant to the DOJ’s shift in focus, the Blanche Memo announces that “[c]onsistent with the narrowing of the enforcement policy relating to digital assets,” NCET is to be disbanded, effective immediately. Similarly, the Blanche Memo reveals that going forward, the DOJ Fraud Section’s “Market Integrity and Major Frauds Unit shall cease cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement frauds.” The Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) “will continue to provide guidance and training to Department personnel and serve as liaisons to the digital asset industry.”
With these significant policy announcements in mind, the Blanche Memo directs federal prosecutors to consider several factors when deciding whether to pursue criminal charges involving digital assets. According to the Blanche Memo, prosecutors:
1.
Should prioritize cases that “hold accountable individuals who (a) cause financial harm to digital asset investors and consumers; and/or (b) use digital assets in furtherance of other criminal conduct, such as fentanyl trafficking, terrorism, cartels, organized crime, and human trafficking and smuggling.” To this end, the Blanche Memo suggests that criminal cases premised on regulatory or compliance violations, such as those “resulting from diffuse decisions made at lower levels of digital asset companies,” may not advance DOJ priorities.
2.
Should not charge “regulatory violations in cases involving digital assets,” including “unlicensed money transmitting under 18 U.S.C. § 1960(b)(l)(A) and (B), violations of the Bank Secrecy Act, unregistered securities offering violations, unregistered broker-dealer violations, and other violations of registration requirements under the Commodity Exchange Act—unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully.”
3.
Should not charge “violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a ‘security’ or ‘commodity,’ and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud.”3
The Blanche Memo also discusses an issue with compensating victims in the digital asset sector. Specifically, it addresses a concern where victim losses due to fraud and theft—including in several high-profile instances where companies had gone bankrupt while maintaining custody of victim assets—have been calculated based on the asset’s value at the time the fraud occurred. This approach, the Blanche Memo says, prevents victims from benefiting from corresponding gains that occurred during or after the fraud (when the victim would have possessed the asset). Accordingly, the Blanche Memo instructs the Office of Legal Policy and the Office of Legislative Affairs to evaluate and propose legislative and regulatory reforms to address this concern and improve asset forfeiture efforts in cases involving digital assets.
The Blanche Memo concludes by affirming the DOJ’s commitment to “fully participate” in President Trump’s Working Group on Digital Asset Markets, established under Executive Order 14178. Specifically, DOJ attorneys will “identify and make recommendations regarding regulations, guidance documents, orders, or other items that affect the digital asset sector” and assist in preparing a report to President Trump, outlining regulatory and legislative proposals designed to advance the policies and priorities set forth in the aforementioned Executive Order.
Implications
As noted in the Blanche Memo, the DOJ has expressed an intent to “narrow” its prosecutorial focus as it relates to digital assets, a step that appears consistent with other recent efforts to bolster innovation and development in the cryptocurrency industry. Pursuant to this change in focus, the Blanche Memo notes that the DOJ “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.” Indeed, the DOJ’s message in the Blanche Memo appears to mirror recent trends from the SEC and CFTC. Members of the digital asset community should take notice as the regulatory framework for cryptocurrencies continues to evolve.
1 In March 2025, President Trump granted full pardons to BitMEX and its co-founders, Arthur Hayes, Benjamin Delo, and Samuel Reed.
2 As just two examples, the SEC pursued enforcement actions against token issuers LBRY, Inc. and Ripple Labs, Inc. in 2022 and 2023, which are discussed in our prior GT Alerts.
3 The Blanche Memo notes that the DOJ may continue to (i) take the position that bitcoin or ether is a “commodity” under the Commodity Exchange Act, or (ii) file securities fraud charges where the “security” at issue is the equity or stock in a digital asset company.
The FTC BOTS Act – Leveling the Ticketing Field
On March 31, 2025, President Trump signed an executive order (EO 14254) titled “Combating Unfair Practices in the Live Entertainment Market.” EO 14254 directs the Federal Trade Commission (FTC) to, amongst other provisions, rigorously enforce the Better Online Ticket Sales Act (BOTS Act or the Act) and address unfair ticket scalping practices.
Overview of the BOTS Act
Enacted in 2016, the BOTS Act aims to prevent ticket brokers from buying large numbers of event tickets and reselling them at inflated prices. The Act applies to tickets for public concerts, theater performances, sporting events, and similar activities at venues that seat over 200 and prohibits an entity from circumventing access controls or security measures used by online ticket sellers (such as Ticketmaster) to enforce ticket-purchasing limits. It also prevents the resale of tickets obtained by knowingly circumventing access controls. Violations of the Act are considered violations of Section 5 of the FTC Act, which prohibits unfair or deceptive practices. Violators are subject to fines of up to $53,088 per violation.
Under the Act, the circumvention of access controls or security measures is construed broadly and applies to automated ticket bots and certain human actions. A ticket bot is a software program designed to rapidly purchase large quantities of tickets the moment they become available. Scalper bots specifically automate tasks like filling out forms, refreshing web pages, and completing the checkout process. Since scalper bots can complete the checkout process much faster than human users, they can buy thousands of limited-edition tickets as soon as they go on sale. Scalped tickets are then resold for higher profit because they are no longer available from the original ticket seller – this practice is known as ticket scalping.
Sellers often set limits on the number of tickets each buyer can purchase. Bots can bypass this limit by rapidly purchasing tickets across multiple accounts or using fake online profiles and IP addresses. Bots may bypass CAPTCHA and other security measures or manage multiple browser sessions simultaneously to purchase large volumes of tickets simultaneously. These tactics may run afoul of the BOTS Act if the seller has access controls or security measures to prevent such activity. The BOTS Act is not only limited to bot activity, though. A person who buys tickets by creating multiple accounts or using proxies and VPNs to disguise their IP address may also be circumventing a seller’s security measures, which may also violate the Act.
Enforcement Action Under the BOTS Act
In January 2021, the FTC filed complaints against three ticket brokers for allegedly using bots to buy tens of thousands of event tickets and then resell them at inflated prices. The FTC alleged that the defendants violated the Act in multiple ways, including using bots to search for and automatically reserve tickets, using software to conceal their IP addresses, and using bots to bypass CAPTCHA security measures. The complaint also alleged that the defendants had created hundreds of Ticketmaster accounts in the names of friends, family, and fictitious individuals and used hundreds of credit cards to bypass ticket limits. In total, the brokers were subject to a judgment of over $31 million, but due to their inability to pay, they were ultimately liable for $3.7 million in civil penalties.
The BOTS Act also empowers state attorneys general to enforce the Act if they determine that their states’ residents have been threatened or adversely affected by violations of the Act. Though there has been little notable state enforcement action to date, senators from both political parties have introduced bills to enable stronger enforcement of the Act. For instance, in May 2024, the Democratic governor of Arizona, Katie Hobbs, signed and passed a state law often referred to as the “Taylor Swift bill” to authorize the state’s attorney general to investigate unlawful uses of bots to purchase multiple event tickets or circumvent waiting periods and presale codes.
Looking Forward
The executive order instructs the FTC to “rigorously enforce” the BOTS Act and to provide state attorneys general and consumer protection officers with information and evidence to further this directive. The EO also directs the FTC to take additional actions, such as proposing regulations and enforcing against unfair methods of competition and unfair or deceptive acts and practices.
EO 14254 follows on the heels of a December 2024 FTC Rule – the Junk Fees Rule – banning junk ticket and hotel fees, which goes into effect on May 10, 2025. Under the Junk Fees Rule, businesses must clearly and conspicuously disclose the total price, including all mandatory fees, whenever they offer, display, or advertise any price of live-event tickets or short-term lodging. According to the FTC, the Junk Fees Rule enables the agency to “rigorously pursue” bait-and-switch pricing tactics, such as drip pricing and misleading fees.
Following the release of EO 14254 on April 8, 2025, two members of Congress, Diana Harshbarger (R-TN) and Troy Carter (D-LA) co-sponsored a bill in the House titled the “Mitigating Automated Internet Networks for [MAIN] Event Ticketing Act.” This bill is a companion bill to the one initially introduced in the Senate by Marsha Blackburn (R-TN) and Ben Ray Luján (D-NM). The bill would create reporting requirements for online ticket sellers to report successful bot attacks to the FTC. The proposed legislation would also create a complaint database for consumers to share their experiences with the FTC, who would, in turn, be required to share the information with state attorneys general. According to Congresswoman Harshbarger’s press release, the legislation aims to build on the BOTS Act and codify EO 14254. There is strong bipartisan support for live-event industry regulation. In light of EO 14254, the FTC’s Junk Fee Rule, and the MAIN Event Ticketing Act introduction, it is safe to say that both state and federal authorities are focused on regulating the live entertainment industry, particularly in the ticket sale context. BOTS Act enforcement may increase in the coming years, and ticket scalpers should beware.
Executive Order Seeks to Reinvigorate Domestic Coal Production
On April 8, 2025, President Trump signed an executive order titled Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241, which builds on the March 20 Executive Order titled Immediate Measures to Increase American Mineral Production (Executive Order 14241) and complements two other executive orders issued on April 8 focused on strengthening the US electric grid and protecting American energy from state overreach. The coal order provides for immediate action to remove restrictions on coal leasing, mining, and exporting and outlines initiatives to extend coal-power infrastructure and support coal technologies. This order is part of the administration’s holistic strategy to promote coal production in order to support domestic job creation, provide reliable energy supply for resurgent electricity demand from emerging technologies, lower energy costs, capitalize on vast US coal reserves, and facilitate coal exports. The order includes the following initiatives and mandates:
Designation of coal as a “mineral” under Executive Order 14241 and as a “critical mineral”: The order directs the Chair of the National Energy Dominance Council (NEDC) to designate coal as a “mineral” under Executive Order 14241, enabling coal and coal projects to qualify for the benefits under Executive Order 14241, including streamlined permitting and accelerated financing initiatives, as outlined in our previous blog posts on March 21 and March 24. The order also directs the heads of the Energy and Interior departments to determine whether coal used in the production of steel qualifies as a “critical material” to be placed on the Department of Energy Critical Minerals List and the Department of the Interior Critical Minerals List.
Evaluating and enabling coal mining on federal lands: The order directs the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Energy to conduct a review of coal resources and reserves contained on federal lands and submit a comprehensive report (1) outlining barriers to mining such coal resources, (2) making policy proposals to address such barriers in order to facilitate the mining of the identified coal resources, and (3) providing an analysis of the impact coal resources could have on electricity costs and grid reliability. The order further directs the Secretary of the Interior and Secretary of Agriculture to designate coal leasing activities as the primary land use for such federal lands containing coal resources identified in the report, to expeditiously process royalty rate reduction applications from federal coal lessees, and to acknowledge the end of the Jewell Moratorium. The Jewell Moratorium of 2016 established a moratorium on coal leasing on federal lands. The Moratorium was lifted by a federal court in 2024.
Extending the life of coal-powered infrastructure: In response to growing electricity demand from artificial intelligence (AI) data centers and other high-performance computing activities, the order directs the Secretary of the Interior, Secretary of Commerce, and Secretary of Energy to identify regions with coal-powered infrastructure sufficient to support AI data centers, evaluate such infrastructure for growth opportunities, and submit to the Chair of the NEDC a comprehensive report with findings and proposals.
Expansive support for coal: The order includes an expansive approach to strengthen the coal industry, including a comprehensive review of restrictive practices towards coal production, measures to increase coal exports, and support for coal technologies. These initiatives include:
Removing regulatory and policy barriers to coal production and use: The order mandates a comprehensive review of guidance, regulations, programs, and policies of executive departments or agencies that promote an energy transition away from coal production and coal-fired electricity generation, including guidance, policies, or agreements of the International Development Finance Corporation, the Export-Import Bank of the United States, and other funding agencies discouraging investment in coal-related projects. Such agencies are directed to eliminate any such preferences against coal use unless required by law.
Facilitating coal exports: The Secretary of Commerce, in coordination with other agencies, is directed to promote exports of coal technology and coal, including facilitating international offtake agreements for US coal.
Streamlining environmental review of coal projects: Agencies are directed to identify to the Council on Environmental Quality any existing or potential categorical pursuant to the National Environmental Policy Act that could support the production and export of coal.
Advancing commercial coal technologies: The Secretary of Energy is directed to take necessary actions to accelerate the development and commercialization of coal technologies, using available funding to support innovations in coal use and byproducts, batteries, power generation, and steelmaking.
Additional guidance regarding these programs and initiatives is expected to be issued within 30-90 days after the order was published on April 8. Broader implications of the reinvigoration of coal production for the data center, AI and electricity grid, and the complementary executive orders will be discussed in a separate blog post.