Alert: New Mexico Is a Step Closer to Legalizing the Supervised Use of Psilocybin
We’ve previously highlighted psilocybin as an alternative treatment for various neuropsychiatric disorders, including anxiety, depression, and PTSD, along with legislative efforts at the state and federal levels to legalize and regulate the psychedelic drug. On March 12, 2025, New Mexico advanced its initiative to establish a therapeutic psilocybin program in the state.
By a bipartisan vote of 33-4, the New Mexico Senate passed Senate Bill 219, also known as the Medical Psilocybin Act, which now awaits a vote in the House of Representatives. If enacted, the bill would allow physicians to prescribe psylocybin to patients suffering from specific qualifying conditions such as major treatment-resistant depression, PTSD, substance use disorders, end-of-life care, and other conditions approved by the state’s Department of Health.
The bill defines psilocybin as “the naturally occurring psychedelic compound 4-phosphoryloxy-N,N-dimethyltryptamine, also known as 4-PO-DMT, and its pharmacologically active metabolite psilocin, 4-hydroxy-N,Ndimethyltryptamine, found in certain mushrooms, but does not include synthetic or synthetic analogs of psilocybin”. The bill proposes the establishment of a nine-member medical psilocybin advisory board to, among other things, “review and recommend to the [health] department for approval medical conditions that may benefit from the medical use of psilocybin” and “recommend formulation or preparation rules and dosage standards for psilocybin”. If the bill is enacted, New Mexico would join Oregon and Colorado as the only states to legalize the supervised use of psylocybin.
EPA Will Review 2024 Rule Amending the TSCA Risk Evaluation Framework Rule
On March 10, 2025, the U.S. Environmental Protection Agency (EPA) announced its intent to reconsider the May 3, 2024, rule amending the procedural framework rule for conducting risk evaluations under the Toxic Substances Control Act (TSCA) (2024 Risk Evaluation Framework Rule). According to EPA, it will initiate a rulemaking “that will ensure the agency can efficiently and effectively protect human health and the environment and follow the law.”
As reported in our February 7, 2025, blog item, earlier this year, EPA Administrator Lee Zeldin announced the “Powering the Great American Comeback” initiative to advance EPA’s core mission while energizing the American economy. EPA notes in its March 10, 2025, press release that under TSCA, EPA is charged with reviewing “the thousands of chemicals already in commerce to make sure they don’t harm people or the environment, supporting Pillar One of the Administrator’s initiative, clean air, land and water for every American, as well as Pillar Three to advance permitting reform, cooperative federalism and cross-agency partnership by better integrating best workplace standards from across the Federal government and industry and aiming to adhere to Congress’s tight timelines for risk evaluations.”
Consistent with President Trump’s Executive Order 14219 requiring the review of regulations to ensure consistency with Administration policy and agencies’ statutory authority, EPA reviewed the 2024 Risk Evaluation Framework Rule, which outlines the process EPA must follow when conducting chemical risk evaluations. EPA states that after completing its review and considering public comments and concerns, including those from other federal agencies, it “intends to initiate further rulemaking in the near future that will reexamine multiple aspects of this rule for consistency with the law and Administration policy.” In its rulemaking, EPA will review whether the approach taken by the Biden Administration to make a single risk determination for a chemical is consistent with TSCA. EPA will also include, among additional considerations, whether the Agency must evaluate all conditions of use of a chemical at the same time in the three years generally allotted by Congress to conduct this review. Additionally, EPA will reconsider whether and how the use of personal protective equipment (PPE) and industrial controls in an occupational work environment should be incorporated into risk evaluations. According to EPA, it will reconsider regulatory definitions expanded by the Biden Administration and evaluate whether the regulation should define terms more broadly than the definitions in the statute. More information on the 2024 Risk Evaluation Framework Rule is available in our May 14, 2024, memorandum.
Commentary
Bergeson & Campbell, P.C. (B&C®) is pleased that EPA is reconsidering the rule. As we discussed in our May 14, 2024, memorandum, we identified several significant flaws in the final rule.
This announcement is consistent with EPA’s request that the courts remand, without vacatur, the ongoing legal challenge to the rule (United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO v. EPA, Case No. 24-1151 (D.C. Cir. 2024), USW v. EPA). Whether the courts will grant EPA’s motion is unclear. The labor unions and environmental non-governmental organizations (NGO) that intervened oppose the motion.
In a post-Loper Bright world, a court decision in USW v EPA on one of the key provisions being challenged, such as the single determination approach, could be a much more durable result than if the court finds that EPA does not have discretion to interpret the statute in that way.
Regardless of whether the case is remanded without vacatur, the 2024 Risk Evaluation Framework Rule will remain in effect, so EPA’s ongoing TSCA Section 6 work will have to conform with the current rule.
McDermott+ Check-Up: March 14, 2025
THIS WEEK’S DOSE
Congress Debates Government Funding. A continuing resolution (CR) to fund the government through September passed the House and will very likely pass the Senate today.
Senate HELP Committee Advances NIH, FDA Nominations, Meanwhile White House Pulls CDC Director Nomination. National Institutes of Health (NIH) director nominee Jay Bhattacharya and US Food and Drug Administration (FDA) commissioner nominee Martin Makary are expected to be confirmed by the full Senate. The White House abruptly withdrew Dave Weldon’s nomination for Centers for Disease Control and Prevention (CDC) director just prior to his Senate confirmation hearing and has not yet announced a new nominee.
Senate Finance Committee Holds CMS Administrator Nomination Hearing. The committee held its nomination hearing for Mehmet Oz, MD, to be administrator of the Centers for Medicare and Medicaid Services (CMS) as this Check-Up went to press.
House Oversight Committee Holds Hearing on Preventing Improper Payments and Fraud. The hearing continued previous committee work broadly focused on improper payments and fraud, including in Medicare and Medicaid.
House Ways and Means Committee Examines Access to Medicare Post-Acute Care. Members discussed barriers to accessing quality post-acute care and highlighted potential solutions.
Senate Aging Committee Discusses Solutions to Senior Loneliness. There was bipartisan concern about the burden of senior loneliness.
CMS Issues Marketplace Integrity and Affordability Proposed Rule. The agency’s first proposed rule in the Trump administration aims to reduce improper enrollments in the Marketplace.
CMMI Releases Statement on Strategic Direction. The Center for Medicare and Medicaid Innovation (CMMI) announced actions to cancel certain models and transition participants to other models.
OCR Announces Investigations into Four Medical Schools and Hospitals. The schools and hospitals being investigated were not officially identified.
Federal Judges Rule Agencies Must Reinstate Fired Probationary Employees. One of the rulings applies to the US Department of Health and Human Services (HHS).
CONGRESS
Congress Debates Government Funding. In advance of the March 14, 2025, government funding deadline, House Republicans on March 8 released a 99-page CR to fund the government through September 30, 2025, the end of the fiscal year (FY). The CR includes short-term extensions of healthcare programs and provisions, including Medicare telehealth flexibilities and community health center funding, through September 30. The legislation includes increases in defense spending and cuts to nondefense spending, including a 50% cut to the Congressionally Directed Medical Research Programs (CDMRP) within the US Department of Defense. CDMRP funds biomedical research on conditions such as cancer, Alzheimer’s disease, and autism.
The CR does not include a Medicare physician payment fix or additional bipartisan health provisions, such as pharmacy benefit manager reform, from the December 2024 bipartisan healthcare package, which has been reintroduced by Sens. Wyden (D-OR) and Sanders (I-VT). Rep. Murphy (R-NC), Co-Chair of the GOP Doctors Caucus, originally said he would oppose the CR if it did not include the so-called doc fix. However, the caucus received a commitment from Republican leadership to include a doc fix in the upcoming budget reconciliation bill, so Rep. Murphy supported the CR.
On March 11, 2025, the House passed the CR mostly along party lines in a 217 – 213 vote. Rep. Golden (D-ME) joined Republicans in voting yes, and Rep. Massie (R-KY) joined Democrats in voting no. In the Senate, the bill needs 60 votes to overcome a procedural hurdle, known as cloture, before final passage, necessitating support from Democrats. Senate Minority Leader Schumer (D-NY) initially pushed back and said Democrats would seek a separate vote on a clean, shorter-term CR that would allow appropriators to finish the full slate of FY 2025 bills. Schumer later reversed and stated he and other Senate Democrats would vote yes on the cloture vote to avoid a government shutdown. The final cloture vote was xx – xx. XX Democrats voted with all but one Republican, Sen. Paul (KY), to achieve the 60 votes necessary to clear the procedural hurdle. As of the time of this publication, a vote on final passage is expected today to avert a government shutdown and complete the FY 2025 appropriations process.
Senate HELP Committee Advances NIH, FDA Nominations, Meanwhile White House Pulls CDC Director Nomination. The Senate Health, Education, Labor, and Pensions (HELP) Committee voted on the nominations of Jay Bhattacharya, MD, for NIH director and Martin Makary, MD, for FDA commissioner. The committee held its nomination hearings last week. Bhattacharya advanced with a vote of 12 – 11 along party lines. Makary advanced with a vote of 14 – 9, with Sens. Hassan (D-NH) and Hickenlooper (D-CO) joining Republicans. Both nominations now move to the full Senate floor, where they are expected to be confirmed. Sen. Hawley (R-MO) expressed concern over Makary’s initial support of Hilary Perkins as FDA chief counsel. Perkins previously worked for the US Department of Justice under President Biden and defended that administration’s abortion and vaccine policies. Sen. Hawley noted that Makary withdrew his support for Perkins, who resigned on March 13, 2025, only two days after becoming FDA chief counsel.
On the morning of Dave Weldon’s scheduled Senate HELP Committee nomination hearing for CDC director, the White House suddenly withdrew his nomination. Weldon was previously a US representative from Florida. He has been subject to significant scrutiny for his views on vaccines, and there have been rumors for some time that his nomination could be withdrawn. At the time of publication, President Trump had not yet announced a new CDC director nominee.
Senate Finance Committee Holds CMS Administrator Nomination Hearing. The Senate Finance Committee held its nomination hearing for Mehmet Oz, MD, to be administrator of CMS as this issue went to press.
House Oversight Committee Holds Hearing on Preventing Improper Payments and Fraud. The hearing included three witnesses who discussed the prevalence of fraud broadly across federal spending, including in Social Security and Medicaid. Members of both parties expressed interest in working together to address waste, fraud, and abuse, but Democrats emphasized the importance of Medicaid and ensuring it remains accessible. Republicans highlighted the Department of Government Efficiency’s role in addressing waste, fraud, and abuse.
House Ways and Means Committee Examines Access to Medicare Post-Acute Care. During the hearing, Democrats predominantly focused on the impact that potential cuts to Medicare and Medicaid (under discussion as part of the ongoing budget reconciliation process) would have on long-term care hospitals and skilled nursing facilities. Republicans focused on the burden of prior authorization for beneficiaries and the impact of workforce shortages on access to care. Both members and witnesses discussed the importance of Medicare telehealth flexibilities in home health and hospice care and the proposal to create a single Medicare payment system for all post-acute care providers.
Senate Aging Committee Discusses Solutions to Senior Loneliness. Witnesses for the hearing included individuals from organizations that provide social services to seniors. Members of both parties expressed concern about senior loneliness and its impact on health outcomes. Both members and witnesses expressed support for the Social Engagement and Network Initiatives for Older Relief (SENIOR) Act and the Older Americans Act. There was discussion about the cost burden of senior loneliness on Medicare and Medicaid.
ADMINISTRATION
CMS Issues ACA Marketplace Integrity and Affordability Proposed Rule. CMS issued a proposed rule on March 10, 2025, that would undo Biden-era policies designed to enhance enrollments through the Marketplace. Key proposals include the following:
CMS proposes to shorten the annual open enrollment period by one month, such that it would run from November 1 to December 15, as under the first Trump administration, instead of November 1 to January 15. CMS also proposes to apply this timeframe to state-based Marketplaces, which were previously permitted flexibility on this front.
CMS proposes to add sex-trait modifications to the list of items and services that may not be covered as essential health benefits beginning in plan year 2026.
CMS proposes to amend the definition of “lawfully present” to exclude Deferred Action for Childhood Arrivals recipients for purposes of enrolling in Marketplace coverage.
CMS proposes to end the availability of the monthly special enrollment period for individuals with household incomes below 150% of the federal poverty level. All Marketplaces would also have to reinstitute pre-enrollment verifications of eligibility for special enrollment periods and conduct further verifications of income when no tax data is available for verification.
The policies would have varying effective dates, some as early as immediately upon implementation, but the proposed rule specifically requests input on implementation timelines. There is a 30-day comment window that ends April 11, 2025. Click here for the press release, and here for the fact sheet.
CMMI Releases Statement on Strategic Direction. On March 12, 2025, CMMI stated that it plans to announce a new strategy focused on choice, competition, consumer empowerment, and evidence-based practices. CMMI will also work to streamline payment models, and some models will end early on December 31, 2025, with participants transitioning to other models. CMMI subsequently announced that the Maryland Total Cost of Care, Primary Care First, ESRD Treatment Choices, and Making Care Primary models will end early. CMMI is considering options to reduce the size of the Integrated Care for Kids model, and the Medicare $2 Drug List and Accelerating Clinical Evidence models will not be implemented. CMMI estimates that ending these models will save taxpayers approximately $750 million but doesn’t spell out how those savings will be realized. Read more about what’s next for value-based care under the Trump administration here.
OCR Announces Investigations into Four Medical Schools and Hospitals. The HHS Office for Civil Rights (OCR) stated that four medical schools and hospitals provide medical education and training that discriminates on the basis of race, color, national origin, or sex. OCR alleges that the institutions are in violation of Title VI of the Civil Rights Act and Section 1557 of the Affordable Care Act. The announcement states that the action aligns with President Trump’s executive order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The institutions subject to the investigation are not officially identified. For more details, please see this article by our McDermott Will & Emery colleagues.
COURTS
Federal Judges Rule Agencies Must Reinstate Fired Probationary Employees. On March 13, 2025, two federal judges ruled that certain federal agencies must reinstate fired probationary employees. The first judge’s order applied only to six agencies, while the second judge’s order applied to 18 agencies, including HHS. Both judges ruled that the firings by the Office of Personnel Management were unlawful. The Trump administration is likely to appeal the decisions. Other efforts by the Trump administration to shrink the federal workforce, including a reduction in force, will likely continue.
QUICK HITS
House Democratic Health Leaders Send Letter to CMS on Staff Firings. The ranking members of the full Ways and Means Committee and Energy and Commerce Committee, along with the ranking members of the Health Subcommittees, expressed concern over the impact of the recent firings of Medicare and Medicaid staff. The letter from Reps. Neal (D-MA), Pallone (D-NJ), Doggett (D-TX), and DeGette (D-CO) poses 15 questions to Acting Administrator Stephanie Carlton and asks for responses by March 17, 2025.
OGC Announces Reorganization Effort. The HHS Office of General Counsel (OGC) will consolidate its regional offices from 10 to four. House Ways and Means Committee Ranking Member Neal and Energy & Commerce Committee Ranking Member Pallone released a statement criticizing the action as inhibiting efforts to reduce waste, fraud, and abuse.
Senate HELP Chairman Cassidy Announces CDC Working Group. Chairman Cassidy (R-LA) along with Sens. Johnson (R-WI), Lee (R-UT), Marshall (R-KS), Murkowski (R-AK), Paul (R-KY), and Scott (R-SC) announced the working group to examine potential legislative reforms to the CDC. The press release states that the working group aims to restore the public’s trust in the CDC.
Congressional Democrats File Amicus Brief in Supreme Court Medicaid Case. All Senate Democrats and 191 House Democrats filed the brief in Medina v. Planned Parenthood South Atlantic. At question is whether South Carolina’s exclusion of abortion providers from the Medicaid program violates the “any qualified provider” Medicaid provision.
MACPAC, MedPAC Release March 2025 Reports to Congress. The Medicaid and CHIP Payment and Access Commission (MACPAC) report includes recommendations to improve the managed care external quality review process, home- and community-based services (HCBS) access, and Medicaid Section 1915 authorities for HCBS. The Medicare Payment Advisory Commission (MedPAC) report includes recommendations for updating 2026 payment rates in traditional Medicare.
Sen. Jeanne Shaheen (D-NH) Won’t Run for Reelection. Sen. Shaheen has been in office since 2009 and serves on the Senate Appropriations Committee. She is the third Democratic senator, following Sens. Peters (D-MI) and Smith (D-MN), to announce they won’t run for reelection. Her announcement exacerbates Democrats’ challenge to take back the Senate in 2026, as open seats are often more difficult to win than those with incumbents running for reelection.
CMS Postpones, Renames Annual Conference. CMS postponed its annual Health Equity Conference, originally scheduled for April 23 – 24, 2025 and renamed it the Conference for Building a Healthier America. A new date has not been announced.
BIPARTISAN LEGISLATION SPOTLIGHT
Reps. Matsui (D-CA) and Bilirakis (R-FL) and Sens. Klobuchar (D-MN) and Wicker (R-MS) reintroduced the Scientific External Process for Educated Review of Therapeutics Act of 2025. The legislation would require the FDA to convene quarterly externally-led scientific-focused drug development meetings to discuss the development and review of rare disease treatments.
NEXT WEEK’S DIAGNOSIS
The House and Senate are both scheduled to be in recess next week and return March 24, 2025. After the federal government is funded, Republicans will return their attention to the budget reconciliation process. Votes to confirm President Trump’s nominees are also expected to continue in the Senate when members return.
Will Bipartisan Legislation Be Possible After Reconciliation?
After President Trump’s address to Congress on Tuesday, March 4, 2025, it is unclear if there will be much desire or willingness on behalf of the Democrats and Republicans to collaborate on legislation during the 119th Congress. President Trump and Congressional Republicans are moving toward “one big, beautiful” reconciliation bill (that is possible to enact without Democratic support) that will reflect most of President Trump’s priorities. The question is: what happens after reconciliation? The answer to that question has implications for issues such as reauthorizing user fees and reforming the Toxic Substances Control Act (TSCA), enacting a Farm Bill that has been extended twice already, and online security — all of which will require bipartisan support to be enacted.
Legislating is difficult. Our system of government is designed in a way that makes legislating quickly challenging, even if one party controls both Houses of Congress and the Executive Branch. (See Obama, Barack). Presidents have increasingly turned to Executive Orders or passing legislation with only the majority party. These routes have limitations. True, durable, legislation takes agreement, negotiation, and ultimately bipartisan support for meaningful legislation to be enacted. Anything that can be developed and deployed quickly can be overturned quickly. Each new administration believes it has a mandate to govern and desires to leave its mark on America. One of the first actions of any new President is to freeze regulatory actions of his predecessor and, in some instances, issue an order repealing a previous Executive Order.
Some of the problems and issues facing the United States require both parties to work together. Unfortunately, the electorate does not reward getting things done (especially if it requires working with the other party to do so) as much as it rewards “standing up” to the other side. Failing to fight or support the party line is punished these days by being primaried. This is one of several unfortunate changes that have come to Washington, D.C. during the past several decades. Partisanship has always existed. There were times when elected officials were able to work together, despite party, and craft policy that was good for the country. When both parties have “skin in the game” they are more likely to protect what they created. When one party “goes it alone,” it sets up a dynamic that encourages the other party to seek to undo that policy at all costs, as happened with the Affordable Care Act.
Republicans control the Executive Branch and both Houses of Congress and are seeking to implement large parts of President Trump’s agenda through a legislative maneuver called budget reconciliation. This process enables legislation to pass with majority only votes, which helps in the Senate where a procedure called cloture requires 60 votes, usually meaning that bipartisan support is required. Under reconciliation, the majority party, in this case Republicans, can pass legislation without a single vote from the minority party. There are some downsides to using the reconciliation process. For one thing, reconciliation legislation has an expiration date. It is not durable. Reconciliation can only affect revenues or expenditures. Republicans will spend much of 2025 attempting to pass reconciliation legislation. This is going to require time, effort, and lots of negotiating among Republicans. At the end of the day, Republicans will pass something, but the scope and cost of it will be limited by the rules of reconciliation.
What all this means for legislation that Congress needs to address post-reconciliation remains to be seen. After what is likely to be a year-long partisan exercise, how much will Democrats be willing to work with Republicans to enact any policies that will be perceived as Republican victories? During the Biden Administration, the dynamic was the same. Another complicating factor is history — the party in power almost always loses seats in the House of Representatives in the mid-year elections. With such a narrow majority in the House, history indicates that Democrats are likely to take control of the House after the 2026 elections. If the past is a predictor of the future, you should rewind your DVR to watch 2023-2024 (the 118th Congress) play out in reverse, with Democrats in the House seeking to stymie any legislation desired by Republicans in the Senate or President Trump.
Buckle up and stay tuned. It is going to be a bumpy ride.
The Lobby Shop- Riding the Tariff Rollercoaster [Podcast]
The Lobby Shop team is back and talking tariffs! Caitlin Sickles, Josh Zive, Paul Nathanson, Liam Donovan and Dylan Pasiuk break down the latest developments in the ongoing tariff rollercoaster—separating the tariffs that have actually been imposed from those still being threatened, along with the retaliation from U.S. trading partners. They explore President Trump’s rationale for using tariffs and threats of tariffs, highlighting key differences between those imposed during his first term versus his second. The team also examines the impact of these trade policies on various sectors, including potential conflicts between the administration’s tariff strategy and its energy agenda, as well as the challenges companies face with sudden cost increases disrupting their supply chains.
DFPI Finalizes Debt Collection Licensing Regulations, Effective July 1
On March 4, the California DFPI finalized regulations under the Debt Collection Licensing Act (DCLA). The final regulations, which take effect July 1, 2025, clarify key licensing and reporting requirements.
Under the DLCA, debt collectors operating in California must be licensed by the DFPI. The law also requires licensed debt collectors to submit annual reports and pay a pro rata assessment to fund DFPI’s oversight of the industry. The final regulations provide critical definitions and reporting requirements to ensure compliance with these obligations.
The DFPI’s final regulations make several key clarifications, including:
Definition of “Net Proceeds”. The regulations establish how debt collectors must calculate net proceeds generated by California debtor accounts, which determines their annual pro rata assessment
Debt Buyers: Net proceeds equal the amount collected minus the prorated amount paid for the purchased debt.
Debt Owners (excluding Debt Buyers): Net proceeds equal fees and charges collected from debtors that would not have been received if the debt had been paid on time.
Other Debt Collectors: Net proceeds equal the total amount received from clients (the companies on whose behalf the debt collectors have been contracted to collect on an account), regardless of fee structure.
For all three categories, net proceeds are calculated before deducting costs and expenses.
Annual Reporting Requirements. Licensees must report (1) the total number of California debtor accounts collected in full or in part, (2) the total number of California debtor accounts where collection was attempted but no payments were received, and (3) the total number of California debtor accounts in the licensee’s portfolio at year-end.
Putting It Into Practice: The DFPI’s final regulations align with the CFPB’s recent push for states to expand regulatory oversight, as outlined in its January 2025 roadmap (previously discussed here). By increasing reporting requirements and clarifying assessment obligations, California is reinforcing its role as a leader in consumer financial protection. Other states may follow suit, signaling a broader trend toward enhanced debt collection oversight at the state level.
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Chopping Into Trade: Investigations of Wood Products, Copper Imports Under Section 232
On March 10, 2025, the U.S. Department of Commerce initiated Section 232 investigations to assess the national security implications of copper and wood product imports.
The investigations were initiated under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862), which grants the president the authority to take action and direct the U.S. Department of Commerce if imports of certain goods are determined to threaten national security.
The investigation is looking to assess copper imports in various forms, including raw mined copper, copper concentrates, refined copper, copper alloys, scrap copper, and derivative products. The Commerce Department is seeking public comments to evaluate factors such as:
The current and projected demand for copper in U.S. defense, energy, and critical infrastructure sectors
The extent to which domestic production and supplies can meet such demands
The impact of foreign competition on domestic copper producers
Any other relevant factors that could affect national security
Public comment is also being sought pursuant to an investigation to assess the national security implications of imports of wood products, including timber, lumber, and their derivative products.
In pursuit of its investigation, the Commerce Department is seeking public comments to evaluate factors such as:
Current and projected demand for timber and lumber in the United States
Role of foreign supply chains, particularly major exporters, in fulfilling U.S. timber and lumber requirements
The impact of current trade policies on domestic timber, lumber, and derivative product production, and whether additional measures, could affect national security
Any other relevant factors that could affect national security
Interested parties are invited to submit written comments, data, analyses, or other pertinent information on both topics by April 1, 2025.
DOJ Turns Attention to Tariff Evasion and Customs Fraud
At the recent Federal Bar Association annual qui tam conference, U.S. Department of Justice (DOJ) officials stated the agency would aggressively pursue False Claims Act (FCA) investigations and that battling customs fraud would be one of its major areas of focus. Given the recent wave of new tariffs (customs duties) under President Donald Trump’s administration and the DOJ’s emphasis on battling tariff evasion using the FCA, U.S. importers should conduct business with a heightened sense of awareness of compliance with U.S. Customs and Border Protection (CBP) laws and regulations.
Traditional Customs Enforcement
Parties that act as U.S. importers of record have traditionally been held liable for payment of duties to CBP. If an importer underpays duties, CBP’s main statutory authority for enforcement is under 19 U.S.C. § 1592. This statute authorizes CBP to not only recover duties underpaid, but also impose penalties that start at two times the amount underpaid and up to the domestic value of the merchandise, depending on the importer’s level of culpability. Though private parties can file allegations of customs violations with CBP (e.g., via CBP’s e-allegations portal), only CBP can initiate an enforcement action under 19 U.S.C. 1592.
How FCA Cases Work
Unlike 19 U.S.C. 1592, both the U.S. government and private parties that act as whistleblowers (known as “relators”) can bring a case under the FCA against an importer for tariff evasion. Federal law says a person or company who knowingly makes, uses or caused to be made or used, a false record or statement, material to an obligation to pay or transmit money or property to the government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money to the government violates the FCA. Such claims are generally referred to as reverse false claims.
Relators and the DOJ have previously investigated companies under the FCA, using this provision to allege that an individual or company underpaid a tariff or import duty (an obligation), thereby creating a false claim through the underpayment of an obligation to the government.
Parties can take some solace in the fact that innocent mistakes or errors are not subject to the FCA. For an underpayment of import duties to constitute a reverse false claim, it must be knowing, meaning that the individual or company making the underpayment has either subjective knowledge that they are underpaying the obligation, is deliberately ignorant of the obligation, or recklessly disregards the obligation. One caveat to this knowledge standard as it relates to a reverse false claim is that even if the initial underpayment is an innocent mistake, it can become a reverse false claim if the individual or company learns of the underpayment and takes no action to correct it.
Predicting Likely Targets in FCA Tariff Cases
Based on the recent DOJ comments, importers should expect, at the very least, misdeclaration of value and country of origin to CBP to be areas of focus for FCA investigations during the Trump administration.
Valuation affects duties, as the amount owed is based on the declared value of merchandise multiplied by the applicable duty rate. For instance, importers importing from a related overseas manufacturer or supplier will be frequent targets for enforcement. Related party import transactions are subject to higher scrutiny, as declaration of the transaction value may not be acceptable to CBP if certain tests are not met.
Country of origin also directly affects duties owed. Most products of China are now subject to an additional 45 percent duty rate (25 percent under Section 301 combined with 20 percent under IEEPA). Even products that are manufactured outside of China could be subject to the additional 45 percent, if Chinese-origin material contained in the product is not “substantially transformed” into a product of a different country.
Thus, we could certainly see more FCA cases involving importers that fail to declare the proper country of origin on goods, particularly in scenarios where manufacturing has shifted outside of China without satisfying the proper rule of origin.
Misdeclaration of value and origin are just examples of the types of FCA customs fraud cases we should expect to see in the next four years. There will undoubtedly be other areas of risk that could result in non-compliance and trigger an FCA case, such as tariff misclassification. Likewise, we can expect private relators will target their efforts toward whistleblowing on valuation, origin and classification violations, as it will increase the chances of DOJ’s intervention in the lawsuit.
In light of the expected increase in enforcement not only under CBP regulations, but also under the FCA, importers now need to ensure they have updated and robust policies and procedures to take into account areas of risk associated not only with past tariff action, but also new tariffs imposed under the current administration.
A senior U.S. Department of Justice official said … that the Trump administration’s focus on government efficiency will include “aggressively” enforcing the False Claims Act, including a strong focus on FCA enforcement of foreign trade issues amid recently imposed tariffs.
www.law360.com/…
Bye Bye Home Buyers? – Proposed Legislation Might Make Home Buyers’ Jobs Harder
One area that we have seen multiple times in TCPAWorld is complaints against parties offering to buy a consumers home.
Well, we have spotted an interesting trend in some state legislatures where bills are being introduced to rein those practices in.
In Tennessee, there is a bill which limits the number of times a developer or someone working on behalf of a developer can contact a homeowner.
In Pennsylvania, a similar bill has been introduced, but the unique factor in that bill is that the Secretary of the Commonwealth must designate a certain geographic region as a “homeowner cease and desist zone”. How long until all of Pennsylvania is a “homeowner cease and desist zone”?
Indiana’s bill is slightly different because it prohibits a telephone solicitor who is NOT a licensed real estate broker from making more than “one unsolicited home purchase inquiry to the same consumer in a single year.”
Typically, when you see multiple states addressing the same or similar issues, there is some model language being used and there are similarities between the states. However, this seems to be different bills and different use cases. Which suggests that these grew somewhat organically in the states.
The other interesting thing is some of the most active lobbyists in state politics are realtors and developers.
So, it will be very interesting to watch as the bills progress to see if there is any traction.
States Ramp Up Workplace Violence Prevention Efforts with New Legislation in 2025
Workplace violence continues to be a primary concern for employers and a challenge to maintaining workplace safety. Still, it is unclear whether there will be further movement on regulation at the federal level under the Trump administration.
States are expected to pick up the slack on this issue, and lawmakers in several states in 2025 are already mulling bills to address workplace safety or expand existing regulations, particularly in the healthcare industry.
Quick Hits
Numerous states are introducing or expanding workplace violence prevention laws, particularly in healthcare settings, to enhance employee safety amid rising concerns.
Specific legislative proposals, such as Alaska’s SB 49 and Massachusetts’s HD.1856, require employers to implement risk assessments, create violence prevention plans, and provide training to protect employees from workplace violence.
In recent years, workplace violence has garnered significant attention from lawmakers across the United States, particularly regarding healthcare settings, which are at a higher risk of violent incidents. California, Connecticut, Illinois, Louisiana, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Texas, and Washington all have laws or regulations that require healthcare employers to implement workplace violence prevention programs.
New workplace violence bills are popping up across the country that could create a host of new compliance obligations for employers, such as requiring employers to develop workplace violence prevention plans, conduct risk assessments, and track and report incidents of workplace violence.
Here is a breakdown of state workplace violence prevention bills being considered in statehouses across the United States this year.
Alaska
Senate Bill (SB) 49—Workplace violence protective orders.
SB 49 was prefiled in the Alaska Senate on January 17, 2025. The bill would enable employers in Alaska to file for workplace violence protective orders against individuals who have committed an act of violence against an employer or employee in a workplace or who made “a threat of violence against the employer or an employee that can reasonably be construed as a threat that may be carried out at the employer’s workplace.” The bill outlines the process for obtaining standard and ex parte protective orders, including the conditions under which they can be issued and the types of relief they can provide. It also would amend existing laws to include workplace violence protective orders and specify the responsibilities of district judges and magistrates in issuing these orders. The bill requires amendments to Alaska’s Rules of Civil Procedure and Rules of Administration It would take effect on January 1, 2026, if it receives the necessary two-thirds majority vote in each house.
Massachusetts
Bill HD.1856—Human service employers.
Massachusetts has several legislative proposals to address workplace safety. HD.1856 would mandate that human service employers in Massachusetts conduct annual risk assessments to identify factors that may put employees at risk of workplace violence and develop a program to minimize these dangers, including employee training and incident reporting systems. Employers would be required to create a written violence prevention plan, make it available to employees and labor organizations, and designate a senior manager to support an in-house crisis response team for employee victims of workplace violence. The bill would also authorize the commissioner of labor to adopt necessary rules and regulations and impose fines for noncompliance while protecting employees from retaliation for reporting workplace violence concerns.
Bill HD.3502 / Bill SD.1639—Healthcare facilities.
HD.3502 and SD.1639 would require healthcare employers in Massachusetts to conduct annual risk assessments to identify factors that may put employees at risk of workplace violence and develop a program to minimize these dangers, including employee training and incident reporting systems. Employers would be required to create a written violence prevention plan, make it available to employees and labor organizations, and designate a senior manager “responsible for the development and support of an in-house crisis response team for employee-victims of workplace violence.”
The bills would further require healthcare facilities to permit employees to take paid leave if they have been the victim of workplace violence and will use the leave to “obtain victim services or legal assistance.” Healthcare employers would also be required to report incidents of workplace violence annually. Additionally, the bills would direct the commissioner of public health to adopt rules and regulations within 180 days of enactment. The bill also includes provisions for improving data sharing and collaboration between healthcare facilities and public safety entities.
Bill HD.2124 / Bill SD.1307—Home healthcare workers.
Bill HD.2124 and SD.1307 would mandate that home healthcare employers in Massachusetts provide annual comprehensive workplace safety training and develop programs to minimize workplace violence risks for home healthcare workers. Employers would be required to conduct safety assessments of service settings, provide workers with communication devices and alarms, and allow workers to refuse service in dangerous situations without penalty. The bill would also require the designation of a senior manager to support an in-house crisis response team and mandate biannual reports on incidents of workplace violence. Additionally, the bill would entitle home healthcare workers to up to seven days of paid leave in a twelve-month period if they are victims of workplace violence and they use the leave to obtain victim services or legal assistance.
New York
Assembly Bill (A) 203—Hospital workplace violence prevention programs.
A203, introduced on January 8, 2025, would require all general hospitals in New York to establish violence prevention programs in accordance with the Centers for Medicare and Medicaid Services (CMS) conditions of participation and workplace violence standards of accrediting organizations. Hospitals in cities or counties with populations of 1 million or more would be required to always have at least one off-duty law enforcement officer or trained security personnel present in the emergency department. Hospitals in areas with populations less than 1 million would be required to have similar security personnel on premises with proximity to the emergency department a priority. The requirement would not apply to critical access hospitals, sole community hospitals, or rural emergency hospitals unless they experience increased rates of violence. The bill would take effect 280 days after becoming law.
J28—Memorializing Workplace Violence Prevention Month.
On January 14, 2025, the New York Senate adopted Senate Resolution No. 28, memorializing Governor Kathy Hochul’s proclamation, which designated April 2025 as Workplace Violence Prevention Month in the State of New York. April is already recognized as the National Workplace Violence Prevention Month on the federal level.
Senate Bill (S) 740 / Assembly Bill (A) 1678—Chapter Amendments to New York Retail Worker Safety Act.
On February 14, 2025, Governor Hochul signed Chapter Amendments (S740/A1678) into law amending the New York Retail Worker Safety Act, a comprehensive measure intended to increase worker safety and address workplace safety hazards in retail settings signed into law in September 2024. The recent amendments changed the requirement for “panic buttons” that would immediately alert law enforcement to a requirement for “silent response buttons” (SRBs) that alert internal staff (security officers, managers, or supervisors). Effective January 1, 2027, SRBs will be required for employers with 500 or more retail employees in New York, not nationwide. Also, employers with fewer than fifty retail employees now only need to provide workplace violence training to their retail employees upon hire, and then every other year rather than annually.
Ohio
House Bill (HB) 452—Hospital systems workplace violence policies.
On January 8, 2025, Ohio Governor Mike DeWine signed HB 452 into law, which is set to go into effect on April 9, 2025. The legislation will require hospitals and hospital systems to establish security plans to prevent workplace violence. The plans must be developed with input from a team that includes current or former patients and healthcare employees who provide direct patient care and be based on a security risk assessment that addresses high-risk areas such as emergency and psychiatric departments.
Hospitals will be required to ensure that security personnel receive training on de-escalation techniques and ensure that “at least one hospital employee trained in de-escalation practices [is] present at all times in the hospital’s emergency department and psychiatric department.” Additionally, hospitals will be required to establish a workplace violence incident reporting system and track such incidents. Hospitals will also be prohibited from discriminating or retaliating against employees who report incidents or participate in investigations.
Oregon
House Bill (HB) 2552—Healthcare entities workplace violence prevention.
HB 2552, introduced on January 13, 2025, would establish new workplace violence prevention requirements for healthcare entities in Oregon. The bill would mandate the development of safety committees, periodic safety assessments, and annual employee training. It would also require healthcare employers to compile and report data on workplace violence incidents to the Oregon Department of Consumer and Business Services.
It would further mandate the Oregon Health Authority to create a grant program to fund workplace violence prevention efforts. Additionally, the bill includes provisions for posting signage, implementing flagging systems for potential threats, and enhancing safety measures for home healthcare staff. The bill would take effect ninety-one days after the 2025 legislative session permanently adjourns, with full implementation by January 1, 2026.
Senate Bill (SB) 537—Healthcare entities workplace violence prevention.
Similarly to HB 2552, SB 537 would establish new workplace violence prevention requirements for healthcare entities in Oregon and contain some similar requirements. However, SB 537 would require the development of safety committees, periodic safety assessments, and annual employee training. The bill would also require healthcare employers to compile and report data on workplace violence incidents to the Oregon Department of Consumer and Business Services. The bill would also take effect ninety-one days after the 2025 legislative session, with full implementation by January 1, 2026.
Virginia
House Bill (HB) 1919—Workplace violence policies.
On March 7, 2025, the Virginia General Assembly passed HB 1919, and the bill is currently waiting for signature by Governor Glenn Youngkin. The bill would require that by January 1, 2027, Virginia employers with one hundred or more employees “develop, implement, and maintain” a workplace violence policy. The policy must include a “mechanism for employees to report workplace violence” and measures to protect workplace safety. The plan must also be “tailored and specific to conditions and hazards” at an employer’s workplace and include identifying individuals or teams responsible for implementing the policy. The bill would further make it unlawful for employers to discriminate or retaliate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities.
House Bill (HB) 1620—Work group to evaluate workplace violence.
HB 1620, which was prefiled in the state House of Delegates on January 3, 2025, would direct the Virginia Department of Labor and Industry to “convene a work group for the purpose of evaluating the prevalence of workplace violence” in the state. The workgroup would “develop recommendations related to (a) maintaining healthy, safe, and secure work environments; (b) educating employers and employees and communicating to them techniques to effectively handle conflicts in the workplace; and (c) employee support services designed to address workplace violence. The bill is currently tabled in committee.
Washington
Substitute House Bill (HB) 1162—Healthcare employer workplace violence prevention plans.
HB 1162 was one of two workplace violence prevention bills introduced in Washington in January 2025 along with a companion legislation, Senate Bill (SB) 5162. The bill would require healthcare employers to develop and implement a workplace violence prevention plan with input from safety or workplace violence committees. The plans would address security considerations, staffing, job design, emergency procedures, reporting of violent acts, employee training, and support for affected employees. Healthcare settings would also be required to conduct timely investigations of workplace violence incidents, review contributing factors, and submit summaries of findings and recommendations to the relevant committee. The bill would mandate annual reviews and updates of the prevention plans and take effect on January 1, 2026.
SB 5162—Healthcare employer workplace violence plans.
While SB 5162 contains similar provisions, it differs in the specifics of committee involvement, reporting requirements, and incident investigation details. The bill would also take effect on January 1, 2026
Wyoming
House Bill No. HB0155—Hospital workplace violence reporting.
HB0155 would require “[e]very hospital, health care clinic and long-term care facility that receives any state funds” to report incidents of workplace violence against health care providers to the Wyoming Department of Workforce Services on a monthly basis starting August 1, 2025. Such reports would be required to include details about the perpetrators, contributing risk factors, types of incidents, victims by job type, and locations of the incidents. The Department of Workforce Services would be required to compile this information and report it to the Joint Labor, Health, and Social Services Interim Committee by October 1, 2026. The bill would further mandate the creation of a standardized reporting form and require rulemaking to implement its provisions, with an effective date of July 1, 2025, for most sections.
Delaware’s Fight to Remain Preeminent Home for Corporations
Delaware is feeling the pressure of backlash from resident corporations over recent decisions by the Delaware Court of Chancery in stockholder litigation, as well as from significant competition from other states, like Texas and Nevada, which are making material changes to their respective corporate laws to attract corporations looking for a friendlier new home state. As Foley reported previously, Texas is vying hard to become the preferred jurisdiction for legal domestication. Senate Bill No. 29 and companion House Bill 15 were filed in the Texas Legislature on February 27, 2025. Those bills introduce a series of corporate reforms, the most significant of which include the codification of the so-called “business judgment rule” and the permission for Texas corporations to adopt an ownership threshold that must be met for derivative claims.
And that is only the most recent step by Texas. In September 2024, Texas opened a statewide business court judicial district modeled after Delaware’s Court of Chancery to accommodate the booming corporate community in Texas, which only continues to grow due to a number of geographic and economic factors. Texas Governor Greg Abbott also recently announced the creation of the Texas Stock Exchange, which will begin facilitating trades and listings in Dallas in 2026. Nevada also has a leg in this race. Its legislature introduced Assembly Bill 239 on February 17, 2025, which, among other things, introduces new processes for reorganizations and revises processes for which a board of directors approves a plan of merger, conversion, or exchange. Notably, that bill also proposes to amend Nevada’s codification of the business judgment rule to require directors to act on an “informed basis.”
To preserve its position as the premier “home” to American corporations, the Delaware legislature is likewise proposing changes to Delaware corporate law. On February 17, 2025, it introduced Senate Bill 21. Among other things, that bill would establish:
New safe harbor protections for directors, officers, or controlling stockholders or control groups, shielding such individuals or groups of individuals from liability if they have interests rendering them “not independent” regarding transactions or other actions taken, and terms for deeming directors and stockholders independent (see proposed revisions and amendments to § 144 of Title 8 of the Delaware Code);
An amendment to stockholder books and records inspection rights to limit by definition the materials a stockholder may demand to inspect and to impose conditions upon bringing a demand to inspect a corporation’s books and records (see proposed revisions and amendments to § 220 of Title 8 of the Delaware Code); and
That controlling stockholders and control groups cannot be held liable for monetary damages for breach of the duty of care (see proposed revisions and amendments to § 144(c) of Title 8 of the Delaware Code).
Among other things, these proposed changes to Delaware’s corporate law seek to ease the volume of stockholder litigation brought in the state, as well as class attorney fees resulting from any successful stockholder action. However, these proposed changes are facing substantial pushback within the state, only a few weeks after the bill’s introduction. Part of that pushback stems from the source of the bill itself — reportedly, it was quickly developed by a working group convened by Delaware’s recently elected Governor Matt Meyer, who specifically cited concern with corporate rumblings of charters moving to other states, like Texas.
Only in its infancy, Delaware’s Senate Bill 21 has already had practical effects, with a stockholder complaint filed in the Court of Chancery on February 26, 2025, alleging that the defendant corporation has strategically (but improperly) avoided direct demands for inspection of books and records in reliance on Senate Bill 21, anticipating its passage will avoid liability as to the corporation. See Assad v. Altair Engineering Inc., No. 2025-0217 (Del. Ch. Ct.).
As the discord between stockholders or other plaintiff classes affected by corporate law and corporations continues to grow within Delaware and its Chancery Court, in the midst of immense competition from Texas, Nevada, and other states, it is yet to be seen whether Delaware can maintain its position as the preeminent home for America’s corporations and, consequently, where and with what success stockholders can file and maintain actions against the corporations in which they own interests.
HHS Secretary Kennedy Directs FDA to Consider Eliminating Self-GRAS Determinations
Is this the start of RFK, Jr., making good on his promise to transform the food industry?
Newly appointed Secretary of Health and Human Services (HHS), Robert F. Kennedy, Jr., directed the U.S. Food and Drug Administration (FDA) to “take steps to explore potential rulemaking to revise its Substances Generally Recognized as Safe (GRAS) Final Rule and related guidance to eliminate the self-affirmed GRAS pathway [1],” on March 10, 2025.
The stated rationale for directing FDA to explore the potential elimination of self-GRAS determinations is to “bring transparency to American consumers” about what ingredients are in the nation’s food supply and to close a “loophole that has allowed new ingredients and chemicals, often with unknown safety data, to be introduced into the U.S. food supply without notification to the FDA or the public,” according to Secretary Kennedy.
Authorization clearing the use of GRAS substances in food stems from the 1958 Food Additive Amendments, which amended the Federal Food, Drug, and Cosmetic Act (FFDCA) to require premarket clearance by FDA for “food additives.” In defining the term “food additive,” Congress specifically excluded from that definition substances that are “generally recognized as safe.” By so doing, Congress exempted GRAS substances from the Food and Drug Administration’s premarket review authority over food additives. (GRAS substances are defined under Section 201(s) in the Act as substances that are “generally recognized, among experts qualified by scientific training and experience to evaluate [their] safety . . . under the conditions of [their] intended use [2].”)
The GRAS Final Rule that the Secretary directed FDA to revise was published in August 2016 and has been effective since October of that year [3]. The rule formally established a voluntary notification process that allowed FDA to consider and comment on, as needed, the GRAS determinations made by industry. In practice, though, FDA began accepting these GRAS notifications in 1997. The GRAS submissions with accompanying data are linked to an FDA Inventory, along with comments made by the Agency on the submissions. Currently, there are 1219 GRAS submissions listed on the Inventory. FDA evaluates an estimated 75 a year. (Prior to 1997, companies were free to petition FDA to affirm by regulation a determination that a substance was GRAS for its intended use. See 21 C.F.R. Part 184.)
Given the personnel cuts and budget shortages being faced by FDA, it remains to be seen whether FDA will have the resources to effectively undertake the regulatory review in any timely way.
There is also a significant question as to what, if any, authority FDA has “to eliminate the self-affirmed GRAS pathway” as described in the press release, without amendment of the Food, Drug, and Cosmetic Act. Right now, the law provides FDA with jurisdiction to authorize only food additives, as defined in the Act, to be used in food. Since the definition of food additive excludes, among other things, GRAS substances, FDA does not have much room, if any, to regulate these substances beyond the way they already have.
Until the day that FDA completes its task of exploring regulatory pathways to end self-GRAS determinations, or Congress intervenes in the meantime to act on the matter, the Secretary’s announcement has no legal effect on the status of ingredients currently marketed.
[1] HHS Secretary Kennedy Directs FDA to Explore Rulemaking to Eliminate Pathway for Companies to Self-Affirm Food Ingredients Are Safe | HHS.gov
[2] See the Food Additives Amendment Act of 1958, signed into law on September 6, 1958, and amending the Federal Food, Drug, and Cosmetic Act of 1938, 21 U.S.C. § 301 et seq.
[3] Federal Register :: Substances Generally Recognized as Safe