Alright, Alright, A Write-Off: Matthew Mcconaughey’s Push for Texas Film Tax Incentives
Texas has long been a hub for film and television production, offering diverse landscapes, a rich cultural backdrop, and some real characters. Back in 2007 the state implemented the Texas Moving Image Industry Incentive Program, which is administered by the Texas Film Commission under the Economic Development and Tourism Division of the Office of the Governor.[1] Allocations have continued to grow ever since.[2] Starting with $20 million in the first year,[3] it is now the largest in state history at $200 million with a 22.5% tax rebate.[4]
However, this funding is still below competitive states like Georgia and New Mexico.[5] If Senate Bill 1 (SB1), which was filed on January 22, 2025, is approved, then $498 million would be allocated “to revamp the Texas Film Incentive, making Texas the movie capital of the world.”[6] The incentive would consist of two parts: “$48 million in grants for small films and TV commercials, and up to $450 million in new tax credits, including Texas residency requirements for workers,” which Lt. Gov. Dan Patrick provides would give Texas $4 back for every $1 invested.[7]
In early 2025, a coalition of prominent actors—including Matthew McConaughey, Woody Harrelson, Renée Zellweger, Billy Bob Thornton, and Dennis Quaid—launched the “True to Texas” campaign.[8] This initiative features a commercial directed by True Detective creator Nic Pizzolatto, where the actors emphasize the economic benefits, such as job creation and local business growth, that could result from increased investment in the Texas film industry.[9]
This push is no surprise given the new film studios opening in the state, including a 546- acre studio in Bastrop.[10] Also, over the past few years, more hit productions, such as Taylor Sheridan’s Yellowstone, 1923, and Landman, have filmed in Texas.[11]
As of February 13, 2025, SB1 has been scheduled for a public hearing in the Senate Finance Committee.[12] Given that our firm has represented clients in some of the industry’s largest and most complex transactions in the entertainment industry and has worked on numerous deals utilizing tax incentives around the world, we continue to monitor the status of SB1 and standby ready to advise clients as needed.
FOOTNOTES
[1] Texas Moving Image Industry Incentive Program | Fort Bend Economic Development Council
[2] Film Subsidies – Texas Public Policy Foundation
[3] Film Subsidies – Texas Public Policy Foundation
[4] McConaughey, Harrelson channel ‘True Detective’ in Texas films ad
[5] McConaughey, Harrelson channel ‘True Detective’ in Texas films ad
[6] Lt. Gov. Dan Patrick: Statement on the State Budget Filed in the Texas Senate – Lieutenant Governor Dan Patrick
[7] Lt. Gov. Dan Patrick: Statement on the State Budget Filed in the Texas Senate – Lieutenant Governor Dan Patrick
[8] Dennis Quaid says Texas wants to be ‘New Hollywood’ in ad: photos
[9] Dennis Quaid says Texas wants to be ‘New Hollywood’ in ad: photos
[10] Bastrop film studio could produce $1.9B over 10 years and Bastrop reels in massive film studio and entertainment complex from California company
[11] McConaughey, Harrelson channel ‘True Detective’ in Texas films ad
[12] TX SB1 | 2025-2026 | 89th Legislature | LegiScan
Top 10 Sports with the Most Injuries
When it comes to sports and recreational activities, physical activity, social interaction, and teamwork are just a few of the many benefits. However, these activities also come with the risk of injuries. From sprains and fractures to concussions, certain sports are associated with higher injury rates than others. We’ll discuss the sports most commonly linked to injuries and the common sports injuries for different age groups.
Sports Most Associated with Injuries
In the United States, about 30 million children and teens participate in organized sports, resulting in over 3.5 million injuries each year. Sports involving contact and collisions like football tend to result in more injuries compared to non-contact activities like swimming. Nonetheless, all sports can lead to injuries from direct contact, overuse, or improper techniques.
According to the National Safety Council (NSC), the following sports and recreational activities reported the highest number of injuries in 2023:
Exercise, exercise equipment: 482,886
Bicycles: 405,688
Basketball: 332,391
Football: 263,585
Skateboards, scooters: 221,313
Soccer: 212,423
Playground equipment: 190,942
Swimming, pools: 166,011
Baseball, softball: 139,940
Trampolines: 111,212
Types of Sports Injuries
There are two main categories of sports injuries: acute and chronic. Acute injuries happen suddenly, mostly due to blows, falls, or twists, and commonly result in sprains or dislocations. The most frequently reported sports injuries include sprains and strains. Chronic injuries, however, develop gradually over time from repetitive strain, such as stress fractures or tennis elbow.
The most common causes of sports injuries include falls, collisions, overexertion, and being struck by objects.
Age Considerations
Younger athletes are generally more susceptible to acute injuries like ligament tears and fractures while participating in sports. However, sports activities account for over 20% of traumatic brain injuries among children in the U.S.
On the other hand, older athletes may not experience the same severity of injuries but are increasingly prone to conditions like knee problems, rotator cuff injuries, and Achilles tendonitis. These injuries can stem from natural aging or from maintaining an active lifestyle.
Conclusion
Injuries are an inherent risk in many sports, but understanding the types of injuries connected with specific activities can help reduce these risks. By promoting safety and awareness, we can continue to enjoy the benefits of sports while minimizing the potential for injury. If you or a loved one have been injured while playing a sport or recreational activity, don’t hesitate to seek help from a personal injury attorney. Remember, prioritizing safety means playing smart!
The Hidden Impact of Sports-Related Head Injuries
Millions of Americans participate in sports and recreational activities for physical fitness, teamwork, socializing, and more. However, the risk of serious injuries from these sports can often be overlooked or forgotten. March is Brain Injury Awareness Month, and since recreational activities offer a significant risk of head injuries, we are going to discuss the different types of sports-related head injuries and symptoms.
Types of Sports-Related Head Injuries
1. Concussions
A concussion is a type of mild traumatic brain injury caused by a blow to the head or a violent shaking of the head and body. Symptoms include:
Headaches
Sensitivity to light and noise
Dizziness
Nausea
Confusion
A majority of traumatic brain injuries that occur each year are mild or concussions. While most people recover from concussions with proper management, studies show repeated concussions can lead to more severe long-term issues.
2. Traumatic Brain Injury (TBI)
Traumatic brain injuries cover a broader range of injuries, including concussions and more severe forms. TBIs result from external forces that cause brain damage. Symptoms vary widely and can include:
Loss of consciousness
Mood swings
Memory loss
Difficulty concentrating
Physical coordination issues
Around 2.8 million people sustain a traumatic brain injury each year in the U.S. The severity of a TBI can range from mild to severe, affecting an individual’s cognitive functioning and quality of life.
3. Chronic Traumatic Encephalopathy (CTE)
CTE is a degenerative brain condition linked to repeated head injuries, such as concussions. Symptoms often do not become visible until years after the injuries occur and can include:
Memory loss
Depression
Impulsive behavior
Progressive dementia
Aggression
CTE is especially concerning for athletes in contact sports like football, where repeated head trauma is common.
4. Second-Impact Syndrome (SIS)
Second-impact syndrome happens when an athlete suffers a second concussion before fully recovering from a previous one. This can lead to severe and potentially life-threatening complications, such as rapid brain swelling and loss of consciousness. SIS emphasizes how critical proper management and recovery are after a concussion.
Injury Prevention
Sports and recreational activities contribute to over 21% of all traumatic brain injuries in American children and teens, according to The American Association of Neurological Surgeons (AANS).
Preventing head injuries in sports requires a well-rounded approach:
Education: Athletes, coaches, and parents should be told about the risks associated with head injuries and the importance of recognizing symptoms.
Proper Equipment: Using appropriate protective gear, such as helmets and headgear, can reduce the risk of injury.
Enforcing Safety: Sports organizations should prioritize and consistently enforce safety rules.
Monitoring Health: Athletes should be encouraged to report head injury symptoms immediately. Regular medical evaluations can also help manage recovery effectively.
By understanding the different types of sports-related head injuries and their potential consequences, we can work together to create a safer environment for athletes. Prioritizing education, prevention, and proper management is essential for protecting the health and well-being of all participants in sports and recreational activities.
Mississippi Gaming Commission Meeting Report (March 2025)
The Mississippi Gaming Commission held its regular monthly meeting on Thursday, March 20, 2025, at 9:00 a.m. at the Jackson office. Executive Director Jay McDaniel, Chairman Franc Lee, and Commissioner Kent Nicaud were all in attendance. Commissioner Jeremy Felder was absent. The following matters were considered:
LICENSING
The Commission approved the issuance of a license to the following:
SUZOHAPP Gaming Solutions, LLC, as a Manufacturer and Distributor
BetMGM, LLC, as a Manufacturer and Distributor
Beau Rivage Resorts, LLC d/b/a Beau Rivage, as an Operator
PNK Vicksburg, LLC d/b/a Ameristar Casino Vicksburg, as an Operator
Modern Gaming, Inc., as a Manufacturer and Distributor
Stadium Technology Group, LLC, as a Manufacturer and Distributor
FINDINGS OF SUITABILITY
The Commission approved findings of suitability for the following persons or entities:
James Michael Brendel – SUZOHAPP Gaming Solutions, LLC
Kristine Elizabeth Brendel – SUZOHAPP Gaming Solutions, LLC
Eric Alan Hession – Caesars Entertainment Inc.
Andrew Morgan Archibald – United Tote Company
OTHER APPROVALS
The Commission approved the following additional items:
IGT
Transfer of the Equity Interests and Securities of De Agostini S.p.A.
Pledges of Equity Interests and Securities
Imposition of Equity Restrictions, including Negative Equity Pledges
Guarantee of Securities and Hypothecation of Assets
Stadium Technology Group, LLC
Continuous Approval of Public Offerings and Private Placements
Pledges of Equity Interests and Securities
Imposition of Equity Restrictions including Negative Equity Pledges
Guarantee of Securities and Hypothecation of Assets
Magnolia Bluffs Casino LLC d/b/a Magnolia Bluffs Casino
Pledges of Equity Interests and Securities
Imposition of Equity Restrictions and including Negative Equity Pledges
Approval of Magnolia Bluffs Casino LLC to Become Under Common Control with SG Gaming Holdco, LLC
End of Other Approvals
Full-Court Coverage for Risks Associated With Major Sporting Events
NCAA March Madness tournaments are among the most anticipated and exciting events in American sports, drawing millions of viewers and generating significant economic activity. But the massive popularity of the tournaments comes with risks that can affect participants, venues, sponsors, and fans. From injuries to property damage and event-related cancellations, this post explores the potential risks and the insurance products available to mitigate the risks associated with major sporting events, concerts, or festivals.
Common Risks
Injury Risks: March Madness, as a high-stakes basketball tournament, inherently involves physical risks for players. Injuries to athletes, whether from collisions, falls, or overexertion, can have serious consequences for the individuals involved and the tournament’s operations.
Liability Claims: Like the athletes, fans and spectators attending the tournament may face also accidents or injuries while at the venue. Additionally, third-party vendors providing services or merchandise at the event could face liability claims if their products or services result in harm.
Event Cancellations or Delays: Unexpected events, such as natural disasters, power outages, or public health emergencies, can cause cancellations or delays in the tournament. These disruptions may lead to financial losses for event organizers, sponsors, and other stakeholders.
Property Damage: The venues hosting the tournament, including arenas and surrounding areas, face potential risks of property damage above and beyond those experienced in their normal operations. Whether from crowd surges, accidents, or other unforeseen incidents, the costs of repairs or compensation can be significant.
Insurance Coverage Options
Several insurance products can manage the risks associated with March Madness and similar events.
Sports Accident Insurance: Under NCAA rules, athletes must have a basic health and accident plan. Coverage can be provided through the school, a parent or guardian’s policy, or the student-athletes’ own policy. The NCAA also provides an insurance program that covers student-athletes who are catastrophically injured while participating in a covered intercollegiate athletic activity. Schools or athletes can purchase more comprehensive programs designed specifically for athletes that also cover potential loss of income if the athlete is unable to play. Sports accident coverage is essential for protecting players during high-risk events, such as NCAA basketball tournaments, and protecting current and future earnings.
General Liability Insurance: General liability insurance covers claims related to injuries or accidents occurring on the premises. For example, general liability insurance may cover injuries to spectators caused by falling objects or slip and falls. Event organizers, sponsors, and venue owners rely on this coverage to protect against legal and medical costs.
Event Cancellation Insurance: Event cancellation insurance helps cover financial losses resulting from event cancellations or delays due to unforeseen circumstances, such as natural disasters or other emergencies. This coverage is particularly important for organizers and sponsors, as it protects their investment against the risk of event cancellation due to circumstances beyond their control. Depending on the specific policy, event cancellation insurance may also cover enforced reduced attendance at the insured event, which covers loss the insured incurs due to unforeseeable circumstances that result in attendance falling below budgeted expectations. For example, if a severe weather event forces a game relocation or results in a reduced crowd due to travel restrictions, event cancellation insurance may compensate organizers for lost revenue.
Property Insurance: Property insurance covers any damage that occurs to the event venue or other associated facilities. It can cover physical damage to the building, as well as the equipment, signage, and other property used during the event. For example, property insurance may cover damage to signs, light poles, or windows caused by students celebrating a tournament win.
Conclusion
While March Madness is thrilling, the risks associated with the tournament are significant, requiring careful planning and protection. Insurance coverage tailored to the unique needs of a major sporting or music event can help mitigate these risks, ensuring that participants, organizers, and fans are protected. By understanding and securing appropriate insurance products, all those involved in the tournament can focus on what really matters—celebrating the excitement of the game.
Federal Circuit Touches on Appellate Standing and Prior Art Determinations in the Context of Post-Grant Review Proceedings
In CQV Co. Ltd. v. Merck Patent GmbH, the Federal Circuit addressed (1) the interaction of indemnification agreements with Article III standing for appeals of post-grant review decisions of the Patent Trial and Appeal Board; and (2) whether all evidence must be addressed by the Board when qualifying prior art.
Background
Merck Patent GmbH (“Merck”) owns U.S. Patent No. 10,647,861 (the “’861 Patent”), which is directed to the composition of an additive flaking for paints, industrial and automotive coatings, printing inks, cosmetics, and effect pigments. Merck sold pearlescent pigments utilizing the invention of the ’861 Patent under the trademark Xirallic.
CQV Co. Ltd. (“CQV”) sells a competing pearlescent pigment under the trademark Adamas. Merck sent communications to CQV customers alleging that CQV’s Adamas products potentially infringed Merck’s ’861 Patent. CQV petitioned the Board for post-grant review of the ’861 Patent in February 2021.
Before the Board, the parties disputed several issues. One of these issues was the prior art status of an early batch of Xirallic named “Sample C.” In its August 2022 final written decision, the Board held that CQV had not provided adequate evidentiary support to show that Sample C constituted prior art.
CQV appealed the decision to the Federal Circuit, arguing that the Board did not consider relevant evidence. Merck challenged CQV’s Article III appellate standing.
Issues
Did CQV have adequate Article III standing to appeal the Board’s final written decision to the Federal Circuit?
Did the Board err in finding that CQV failed to show, by a preponderance of the evidence, that Sample C constituted prior art against Merck’s ’861 Patent?
Reasoning and Outcome
(1) CQV did have adequate Article III standing to appeal the Board’s final written decision to the Federal Circuit.
As the party appealing a final written decision by the Board, CQV had the burden of showing that it suffered an injury in fact sufficient to confer Article III standing. Gen. Elec. Co. v. United Techs. Corp., 928 F.3d 1349, 1353 (Fed. Cir. 2019). To establish injury in fact, it is generally sufficient to show that the appellant “has engaged in, is engaging in or will likely engage in activity that would give rise to a possible infringement suit.” Grit Energy Sols., LLC v. Oren Techs., LLC, 957 F.3d 1309, 1319 (Fed. Cir. 2020).
CQV filed declarations alleging that CQV had entered into an indemnification agreement with at least one customer as a result of Merck’s communications. According to the Federal Circuit, although Merck’s communications did not identify any specific CQV product as infringing Merck’s ’861 Patent, standing does not require such a specific assertion of infringement by a patentee.
Because at least one customer purchased CQV’s Adamas product in the US, Merck communicated with that customer, and CQV formed an indemnity agreement with that customer, CQV had established Article III standing to appeal the Board’s final written decision.
(2) The Board erred in finding that CQV failed to show, by a preponderance of the evidence, that Sample C constituted prior art against Merck’s ’861 Patent.
In a post-grant review, the petitioner bears the burden to show that an asserted reference qualifies as prior art by a preponderance of the evidence. To meet this burden CQV presented several pieces of evidence relating to the prior art status of Sample C. The Board’s decision did not address two items of testimonial evidence: testimony that Xirallic could generally be purchased by customers after it was released by quality control, and testimony that the quality control for the Adamas products required two to three weeks. The Board held that the other pieces of evidence, taken together and unrebutted, failed to establish that Sample C was probably available to the public before the April 30, 2012 critical date.
“The Board is obligated to articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made.” Alacritech, Inc v. Intel Corp., 966 F.3d 1367, 1372 (Fed. Cir. 2020). “Failure to explicitly discuss every issue or every piece of evidence does not alone establish that the tribunal did not consider it,” Novartis AG v. Torrent Pharms. Ltd., 853 F.3d 1316, 1328 (Fed. Cir. 2017). The Federal Circuit characterized the testimony omitted by the Board as “highly material and unrebutted evidence” that Sample C was available to the public before the critical date.
Because the Board discarded this testimony evidence without explanation, the Federal Circuit could not reasonably discern whether the Board followed a proper path in determining that CQV failed to show that Sample C constituted prior art. The Federal Circuit vacated the Board’s decision and remanded with instructions for the Board to explain its reasoning with respect to all the evidence presented.
Virginia Legislature Passes Bill Restricting Minors’ Use Of Social Media to One Hour Per Day
On March 11, 2025, the Virginia legislature passed a bill that would amend the Virginia Consumer Data Protection Act (“VCDPA”) to impose significant restrictions on minor users’ use of social media. The bill is pending signature by Virginia Governor Glenn Youngkin, who has until March 24, 2025 to sign it into law. The bill comes on the heels of recent children’s privacy amendments to the VCDPA that took effect on January 1, 2025.
If signed into law, the bill would amend the VCDPA to require social media platform operators to (1) use commercially reasonable methods (such as a neutral age screen) to determine whether a user is a minor under the age of 16 and (2) limit a minor’s use of the social media platform to one hour per day, unless a parent consents to increase the limit. The bill would prohibit social media platform operators from altering the quality or price of any social media service due to the law’s time use restrictions.
If signed into law, the amendments to the VCDPA would take effect on January 1, 2026.
Delaware Court Recognizes D&O Coverage for Non-Cash Settlements
The trend of Delaware court decisions favoring policyholders continues with a favorable ruling in AMC Entertainment Holdings, Inc. v. XL Specialty Insurance Company, et al. The Delaware trial court found that AMC’s settlement payment, made in the form of AMC shares valued at $99.3 million, qualified as a covered “Loss” under its directors and officers (D&O) liability insurance policy. This ruling is noteworthy for a variety of reasons, particularly because it establishes that non-traditional forms of currency, like stock, can be a covered “Loss” under D&O policies.
Background of the Underlying Action
AMC, the movie theater chain, was financially strained during the pandemic. It experienced a dramatic surge in stock price, turning into a “meme stock” due to retail investor activity. To take advantage of the situation, AMC sought to issue more common stock. However, shareholder approval to increase the common stock issuance was blocked, prompting AMC to create a new security—the AMC Preferred Equity Units (APEs). These units carried voting rights similar to common stock and were intended to convert to common stock if authorized by shareholders.
This led to a legal battle with shareholders, who filed lawsuits to prevent AMC’s proposal to convert the APEs into common stock. The suits were consolidated in Delaware’s Court of Chancery.
AMC notified its D&O insurers of the shareholder claims, which proceeded to mediation. The day after mediation, AMC received a settlement offer and had discussions with its insurers about the proposed terms. A week later, AMC settled the litigation, agreeing to issue 6,897,018 shares of common stock and pay the plaintiffs’ attorneys’ fees. AMC recorded this settlement as a contingent liability and expense on its books and valued it at $99.3 million.
AMC’s D&O insurers denied coverage. After AMC commenced coverage litigation, most insurers settled, except for one excess insurer that continued to refuse coverage. AMC and the insurer moved for summary judgment.
The Parties’ Arguments
The insurer argued that there was no coverage for the settlement payment for three reasons. First, it argued that the settlement payment was not a “Loss” under the terms of the policy. The policy defined “Loss”, in relevant part, as “damages . . . settlements . . . or other amounts . . . that any Insured is legally obligated to pay.” Further, the policy provides that the insurer will “pay ‘Loss’ on behalf of AMC.” The insurer contended that because the settlement involved the issuance of stock, not cash, and because the insurer could not pay the settlement on AMC’s behalf, it was not a covered “Loss”.
Second, the insurer argued there was no “Loss” because AMC did not suffer economic harm by issuing the stock. And third, even if settlement in the form of stock issuance was a covered “Loss,” the insurer was not obligated to pay it because AMC did not receive the insurer’s prior written consent.
AMC countered that the settlement met the policy’s definition of “Loss”, which is not limited to cash payments, because it was an amount that AMC was “legally obligated to pay.” AMC also argued that it suffered an economic harm since it recognized a permanent loss in its accounting by issuing new shares and suffered an opportunity cost in providing the shares. Finally, AMC believed it received the insurer’s consent on a conference call about the anticipated settlement.
The Decision
The court found in favor of coverage, granting AMC’s motion.
As for the definition of “Loss,” the court found that “Loss” was not limited to cash payments. It emphasized that, under Delaware law, stock is a form of currency that can be used for a variety of corporate purposes, including settling debts. Thus, AMC’s issuance of stock was deemed a covered “Loss,” which the court refused to limit in a way not explicitly provided for in the D&O policy.
In further support of AMC’s covered “Loss,” the court looked to the policy’s bump-up exclusion, which uses the word “paid” twice. The court stated, “[t]his is exclusion is not applicable to the issue presented, but its use of the word ‘paid’ is relevant” because words used in different parts of a policy are presumed “to bear the same meaning throughout.” The court reasoned that because under Delaware Law the bump-up exclusion, and its use of the word “paid,” can apply to stock transfers, it is “necessarily implie[d] that stock can be an amount AMC ‘pays’ which creates a covered ‘Loss’.” Bump-up exclusions are a common insurer defense and source of frequent coverage disputes, including in Delaware, but here the insurer’s bump-up wording ended up supporting the policyholder’s position in favor of coverage.
The court disposed of the insurer’s “economic harm” argument because the policy did not condition coverage on the existence of such harm. Once again, the court refused to “insert a restricting clause into the Policy.”
Finally, the court ruled that whether AMC sought the insurer’s consent to settle, or waiver of consent, on a phone call was a factual issue to be decided by a jury. However, the court noted that Delaware law allows a policyholder that does not comply with consent requirements to obtain coverage by rebutting the presumption that the insurer was prejudiced by the breach and showing that the settlement was reasonable.
Discussion
This case has a has a variety of takeaways for policyholders.
Non-Cash Settlements: Non-cash settlement payments, including stock, may be covered as a “Loss” under D&O policies in Delaware. While AMC’s non-cash payment was in stock, the court’s ruling may apply equally to a variety of other payment forms, such as cryptocurrency or other amounts that insureds are legally obligated to pay as damages or settlement. Policyholders should carefully review policy language regarding the definition of “Loss” to determine if there is coverage for non-cash settlement payments.
Delaware Coverage Trends: Over the past few years, Delaware courts have issued several significant rulings, many in favor of policyholders. The court’s decision in this case is yet another example of this. Delaware’s leadership in corporate governance and shareholder litigation also bleeds over into insurance disputes. In the recent decision, the court ruled in AMC’s favor by relying on Delaware law recognizing that stock is a form of currency. Insurers and policyholders will continue to pay attention to Delaware’s developing role in issuing important coverage rulings.
Choice of Law Matters: In one such landmark decision, the Delaware Supreme Court held that Delaware corporations and their insured officers and directors should be able to get the benefit of Delaware law governing their D&O coverage disputes. The AMC case exemplifies a Delaware policyholder reaping the benefits of Delaware law.
First, it was the Delaware’s Chancery court’s decision in a non-insurance suit determining whether a claim was a derivative or direct claim that the Superior Court used to support the conclusion that AMC’s settlement was a covered “Loss” because “[s]tock is a form of currency.” Other jurisdictions may not have similar law to support such a conclusion.
Second, the AMC court held that if the company did not seek the insurer’s consent to settle, it may still obtain coverage if it can rebut the presumption that the insurer was prejudiced and show that the settlement was reasonable. This is not true in all jurisdictions. See, e.g., Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 738 F.3d 95, 104-06 (4th Cir. 2013) (recognizing that, under Maryland and possibly Tennessee law, an insured’s breach of a policy’s consent to settle provision negates coverage without regard to whether the insurer was prejudiced by the breach).
The point is that choice of law is significant, and Delaware policyholders may be able to leverage a growing body of favorable Delaware law on important coverage issues. Conversely, the importance of what law governs an insurance policy makes choice-of-law, choice-of-forum, and similar policy provisions even more significant when insurers mandate application of another state’s law. These provisions often go unnoticed but can have an outsized impact on coverage in the event of a dispute.
Policy Drafting Matters: The court’s refusal to rewrite the policy highlights the importance of clear and unambiguous language. Insurers must ensure that policy’s are drafted precisely, and policyholders must remain vigilant to ensure that insurers are not making inferences or interpreting policy language to support their preferred reading if it is not stated expressly in the policy. It is the terms of the policy—not the insurer’s unstated intentions—that controls.
Consider Insurance Ramifications in Underlying Litigation: Policyholders seeking defense and indemnity coverage under liability policies should be strategic in how they approach settlement in underlying litigations, keeping an eye towards potential coverage and ways to maximize recovery. Small changes, like nuances in settlement agreements or accounting practices, can make or break claims for millions of dollars of potential coverage. In the AMC case, for example, the company recorded the settlement as a contingent liability and expense valued it at $99.3 million, which the court relied on to support a finding that the non-cash payment was covered loss.
Records of Insurer Communications: In the midst of high-stakes settlement negotiations and fast-paced litigation, it is not always feasible to document all communications with insurers. Nonetheless, this case shows the risks of not documenting what is said during conversations held in-person or via phone or video call. This is critical to avoid post-conferral disputes. The AMC court was unable to resolve the question of whether the insurer consented to AMC’s settlement because a factual dispute existed as to what was said during a phone call. It is unclear if a post-call confirmation email would have helped here, but, at a minimum, these kinds of written records can potentially minimize the risk of factual disputes.
March Madness Bracket Pools in the Workplace: Legal Compliance Tips Before Tip-Off
With March Madness approaching, some employers may wish to get in on the action by sponsoring bracket pools to boost employee camaraderie or strengthen relationships with customers or clients. But before diving in, businesses may consider that such pools, whether structured as free-to-enter sweepstakes or paid contests, may raise concerns with state gambling laws and regulations.
Quick Hits
Employers considering hosting NCAA bracket pools should be aware of state gambling laws, as the structure of these pools could potentially classify them as illegal gambling.
Sweepstakes, as free-to-enter contests, may face fewer legal concerns, but businesses must still comply with specific state regulations that govern such promotional activities.
Millions of Americans will fill out brackets for the NCAA Division I Men’s and Women’s college basketball tournaments, often called “March Madness,” and enter bracket pools and contests. Some businesses may consider hosting a bracket pool of their own, and they may also want to use the contest to encourage certain behaviors, such as donations to a particular charity, overtime work, or collecting contact information for potential new customers or clients, by making such an action a requirement to enter the pool.
However, beyond employee distraction and productivity concerns, businesses operating bracket pools or similar contests/promotions may face potential legal risks under state gambling and sports betting laws and regulations. Here are some considerations for employers.
Gambling Laws
While some state-to-state variations exist, state laws generally prohibit or restrict gambling and other games, such as raffles, sweepstakes promotions, and contests. In general, states may find a game or contest to be illegal gambling when there is (1) consideration required to enter (Consideration), (2) an element of chance (Chance), and (3) something of value won (Prize or Reward).
Raffles
A raffle involves participants purchasing a ticket for a random draw, the winner receiving a prize or a portion of the proceeds from the ticket sales. The typical raffle is likely to be considered gambling in most states and potentially unlawful. There is consideration in the form of a fee to purchase a ticket, chance in that the winner is picked randomly, and a prize. Some states have exceptions for nonprofit organizations to use raffles to raise funds, but even then, many require the entity hosting the raffle to register with or obtain a permit from the state.
Sweepstakes
Sweepstakes are free-to-enter (“No Purchase Necessary”) games in which the winner is randomly selected. They are often used as promotional tools. Since sweepstakes are free-to-enter, they involve consideration and likely raise fewer concerns about illegal gambling. However, many states have specific regulations or other requirements regarding sweepstakes, with some requiring certain sweepstakes to be registered.
Contests of Skill
A contest of skill is a game that depends on the participants’ skill, and an entry fee may be charged (e.g., baking contests, art contests, or three-on-three basketball tournaments) without raising concerns that it is a form of illegal gambling. However, most games involve elements of both skill and chance. The more the outcome depends upon an element of chance, the more likely the game will be considered a game of chance and involve gambling laws.
Most states follow a “predominate factor test” where a game will be considered a game of chance if the outcome is predominantly based on a random occurrence, even if skill can improve chances of winning. Other states follow the “material element test,” which examines whether the outcome depends on chance to a material degree. A minority of states follow the “any chance test,” a stricter standard that, as it says, considers a game to be a game of chance if it involves any chance whatsoever.
Sports Betting
Since the Supreme Court of the United States struck down a federal prohibition on sports betting in 2018, legalization by states has spread rapidly across the country. Sports betting is now legal either online or in-person at casinos in thirty-nine states, and the American Gaming Association (AGA) estimates that as much as $3.1 billion will be wagered legally on the men’s and women’s college basketball tournaments in 2025. However, sports betting is still not legal in several states, including California and Texas; and, even in states where it is legal, there are strict regulations for where betting is legal and who can operate sports betting pools.
Bracket Pools
Men’s and women’s college basketball tournament contests or pools involve participants filling out the tournament brackets with projected winners. Typically, points are awarded for correct picks, with point amounts increasing each progressive tournament round. The winners are based on those who made the most correct picks or received the most points for correctly selecting game winners.
However, such pools may raise illegal gambling concerns, particularly if participants are required to pay a fee to enter. Moreover, even if a monetary fee is not charged to enter, requirements that participants take some action, such as donating to a charity to gain a “free” entry, could be interpreted as a form of consideration. Free-to-enter contests raise fewer concerns, but eliminating such a requirement to enter may undermine a purpose for hosting a game if one goal is to entice entrants to take a certain action.
Beyond the issue of consideration, bracket pools could be viewed as games of chance, even though research and knowledge of college basketball may improve chances of winning. Filling out a bracket requires selecting the outcome of sixty-three games (not including the “First Four”) in a tournament involving sixty-eight teams, meaning the outcome still depends on many factors outside participants’ control.
Next Steps
Before launching a March Madness bracket pool or similar contest, employers might want to consider the program’s structure, whether there is a cost for entry or if it qualifies as a contest of chance, review specific state laws where they operate, and consider the legal risks. Businesses may further want to consider the legal status and requirements for operating sports betting in their state. While there have been few major prosecutions or enforcement actions targeting office college basketball tournament bracket pools, the larger the scale of the contest and the higher the amount of the prize money could draw scrutiny from regulators.
Artists Protest AI Copyright Proposal in the U.K.
British Prime Minister Keir Starmer wants to turn the U.K. into an artificial intelligence (AI) superpower to help grow the British economy by using policies that he describes as “pro-innovation.” One of these policies proposed relaxing copyright protections. Under the proposal, initially unveiled in December 2024, AI companies could freely use copyrighted material to train their models unless the owner of the copyrighted material opted out.
Although some Parliament members called the proposal an effective compromise between copyright holders and AI companies, over a thousand musicians released a “silent album” to protest the proposed changes to U.K. copyright laws. The album, currently streaming on Spotify, includes 12 tracks of only ambient sound. According to the musicians, the silent tracks illustrate empty recording studios and represent the impact they “expect the government’s proposals would have on musicians’ livelihoods.” To further convey their unhappiness with the proposed changes, the title of these twelve songs, when combined, reads, “The British government must not legalize music theft to benefit AI companies.”
High-profile artists like Elton John, Paul McCartney, Dua Lipa, and Ed Sheeran have also signed a letter urging the British government to avoid implementing these proposed changes. According to the artists, implementing the new rule would effectively give artists’ rights away to big tech companies.
The British government launched a consultation that sought comments on the potential changes to the copyright laws. The U.K. Intellectual Property Office received over 13,000 responses before the consultation closed at the end of February 2025, which the government will now review as it seeks to implement a final policy.
No Infringement of Nonfiction Work by Makers of Tetris Film – Court Uses Wrong Analysis to Reach the Right Result
Ackerman v. Pink asks how much of a written history can be claimed as proprietary by the author of that history. The answer: Not much. It is black letter that the author of a non-fiction work cannot prevent others from using historical facts in some other work – even if those historical facts are known only because of the author’s independent research. Copyright covers only the author’s expression of the research, not the research itself.
Ackerman is interesting because the analysis the court uses to separate the historical fact from the author’s expression is misplaced – even though the Court appears to have reached the right conclusion.
Daniel Ackerman, the author, sued several entities claiming that the film Tetris (the “Film”) infringed his copyright in a book he wrote about the video game Tetris – The Tetris Effect: The Game that Hypnotized the World (the “Book”). The Book purports to be a non-fiction history of the development of the video game Tetris. The Film also purports to tell the same story – albeit with some dramatic embellishments.
The opinion by district judge Katherine Polk Failla recites the relatively vanilla proposition that historical facts cannot be claimed by an author of a non-fiction work of authorship. So far, so good. The problem, however, is where the court compares certain purportedly historic scenes in the Book with how they are portrayed fictionally in the Film in an effort to separate the facts from the expression.
The court recounts several factual differences between the portrayal of historical scenes in the Book and the dramatization in the Film to hold that the expression of the former is not copied by the latter. For example, the Book describes one of the characters pitching Tetris to Sega in Japan. In the Movie, however, there are several differences including the fact the scene takes place in Seattle. Given that that historical facts described in the Book are not protected by copyright, whether the Film changed some of the facts should be immaterial to the court’s analysis. To the extent the author of the Book described certain scenes exactly as they happened, the Film was within its rights to portray those same facts as they happened. Nonetheless, the court’s analysis, to some degree, depends on these factual differences to hold that the Film does not copy the Book author’s expression.
The Court went on to compare the “total concept and overall feel of the two works” by focusing on the organization and focus of the Book and Film. This framework does seem to separate Book author’s expression from the unprotected historical facts. For example, the court noted that “the Book jumps through time to provide as much background and context as possible for the people and events it portrays, the Film proceeds largely chronologically.” The court, however, could find no evidence that the Film somehow misappropriated the way the author “selected, coordinated, and arranged the facts in his Book.”
While Judge Polk Failla reached the right result (in our view), her focus on the difference in the facts unnecessarily muddies the water on separating protected expression from something underlying that expression that is in the public domain. A subsequent author who wishes to write a book or make a movie about an historical event should not be required to change the historical facts to avoid a finding that they copied the original author’s expression – even though the makers of the Film chose to do so here.
If You Are Uptight About AI, This May Relax You
While AI has many people uptight, Aescape has developed technology to help you relax – AI robotic massage. Aescape touts that it combines the timeless art of massage with robotics and artificial intelligence to deliver an exceptional massage experience every time. The “Aertable” (i.e., the massage table) has bolsters, headrests, and armrests that are all adjustable to provide a customized fit during each session. It also has continuous feedback which allows for real-time adjustments to optimize comfort. The “Aerscan” system captures 1.2 million data points, precisely mapping your body’s muscle structure to create a unique blueprint for a highly personalized massage experience. “Aerpoints” replicate the seven touch techniques of a skilled therapist, simulating the knuckle, thumb, cupped hand, blade of hand, palm, forearm, and elbow. The “Aerview” provides personal control so you can adjust the pressure, manage the music, or customize the display to create a session tailored to your preferences, needs and mood. The company has developed “Aerwear” a high-compression performance fabric that enhances body detection for the system and allows Aerpoints to move smoothly over your body. Wearing it is mandatory during the massage. The tables are equipped with advanced safety features, including force sensors and pause and emergency stop features to prevent or abate issues if things go wrong. Aescape is a classic example of an application of AI and robotics that will interact with humans. We will see many more such applications from this point forward. While Aescape seems to have anticipated some of the potential problems that can arise, any AI robotic application that interacts with humans has the potential for a variety of legal issues. The following are some of the general legal issues that may be relevant to AI robotic applications that interact with humans. But the actual issues will vary by application.
Despite the mixed feelings by some therapists about this technology, the $19B massage industry faces significant challenges. At least some of these challenges can be addressed by AI robotic massage. Some of the problems relate to delivering consistent, high-quality experiences, client satisfaction can vary from one session to another, some locations have a shortage of skilled therapists and therapists work limited hours. AI robotic massage can address many of these issues due to its consistency and 24/7 availability.
Aescape seems to be gaining traction. After launching with Equinox in New York City, Aescape reported exceptional consumer adoption with high utilization and repeat rates, driving a notable spike in gym memberships. This led to a national expansion to 60 Equinox locations. Aescape has also had success with leading hospitality brands (e.g., luxury hotels) and some NBA and NFL teams.
By now many questions are likely going through your mind. Can robots really replace the “human touch” aspect of massages? Will this technology replace massage therapists, leading to job loss? Can AI assist human massage therapists? It is beyond the scope of this post to cover all of these and other valid questions. But if you are interested, these topics are well-covered in the following articles – Will AI Impact the Employment of Massage Therapists? and 10 Ways Massage Therapists Can Use AI.
Aescape is a classic example of an application of AI and robotics that will interact with humans. We will see many more such AI robotic personal services applications from this point forward. While Aescape seems to have anticipated some of the potential problems that can arise, any AI robotic application that interacts with humans has the potential for a variety of legal issues. The following are some of the general legal issues that may be relevant to AI robotic applications that interact with humans. But the actual issues will vary by application.
Liability and malpractice: One often raised concern with autonomous applications is their safety and reliability. Despite best efforts to anticipate and provide failsafes for potential problems, this remains a risk. Technology malfunctions can cause physical harm. This raises concerns about potential liability issues. Will harmed clients have a claim in the nature of “malpractice” or product liability, or both? To complicate matters further, for harms resulting from AI-assisted, human massage, how should the liability be allocated between the technology provider and the therapist? In some cases, it may be difficult to obtain insurance for such applications, especially for new, unproven AI technology. If you are a location (spa, health club, etc.) deploying the technology, it would be wise to ensure you have an effective indemnity.
Privacy and data protection: To optimize the personalization of AI driven applications, a lot of personal data is needed. Aescape’s system claims to scan and store detailed body data, mapping over 1 million 3D data points of a person’s body. Massage therapists often inquire whether the client has any injuries, recent surgeries or medical conditions. More generally, AI robotic massage technology can employ a database to analyze a client’s physical condition, medical history, preferences and other personal information to create a customized massage tailored to their individual needs. All of this raises privacy concerns about how this sensitive personal information, including information typically covered by HIPPA, is stored, used, and protected. From a practical perspective, some clients may be less willing to share their sensitive personal information and medical history with a machine. While privacy is always important, there may unique considerations in crafting a privacy policy in these cases and it will be prudent to prioritize transparency and obtain explicit consents from clients before incorporating AI into their sessions. There may be legal questions on whether clients are fully informed about the nature of the robotic massage, the data collected and how it is used, and whether clients can provide informed consent, especially given the novelty of the technology.
Professional licensing: Massage therapists require licenses. Will AI systems need to be “licensed” in a manner like human massage therapists. If so, how this would be implemented? Or will certain jurisdictions prohibit unlicensed, non-humans. And while most massages are not deemed to be medical treatment, some can be. To the extent AI robotic massage crosses that line, it could involve the unauthorized practice of medicine.
Regulatory compliance: As a new technology, AI robotic massage systems may face challenges in meeting existing regulations for massage therapy and medical devices, where applicable. There could be a need for new regulatory frameworks to address this emerging field.
Consumer protection and marketing: There could be legal issues related to ensuring the safety and effectiveness of the robotic massage systems, as well as truthful marketing of their capabilities. The FTC has warned companies about overstating the capabilities of AI technology.
Intellectual Property: As with any new technology, there may be patent disputes or copyright issues related to the AI algorithms and robotic designs used in these systems. It is prudent to work with IP counsel to protect your IP and assess whether you might be infringing on any third-party IP.
These are some of the potential issues in the complex legal landscape that AI robotic applications may face. Other issues will undoubtedly arise.