Supreme Court Hits the Reset Button on the National Environmental Policy Act
On May 29, 2025, the US Supreme Court pressed the reset button on the National Environmental Policy Act (NEPA), issuing an 8-0 decision intended to convert what NEPA has become, a “judicial oak,” back into the originally intended “legislative acorn.” Justice Kavanaugh, joined by Chief Justice Roberts and Justices Thomas, Alito and Barrett, penned the opinion of the Court in Seven County Infrastructure Coalition v. Eagle County. Justice Sotomayor, joined by Justices Kagan and Jackson, wrote a concurrence.
The question before the Court was whether NEPA requires an agency to evaluate environmental impacts from projects that may be separate in time or space from the project before the agency. Under NEPA, federal agencies have an obligation to evaluate the environmental impacts of a federal action or project that are “reasonably foreseeable” effects of the action. The infrastructure project at the center of the litigation is an 88-mile-long railway in Utah’s Uinta Basin. The railway’s proposed purpose is to transport goods, predominantly expected to be waxy crude oil, out of the Basin and towards refineries along the Gulf Coast. In the project opponents’ challenge to the US Surface Transportation Board’s (STB) decision to approve the railway, the DC Circuit held that the STB had failed to consider the effects of increased oil refining along the Gulf Coast and the additional oil production that might take place in the Basin. Key to the Supreme Court’s opinion, the DC Circuit found that these effects were attributable to the railway.
Pulling from its decisions dating back to 1976, the Court’s opinion implements clear principles for NEPA analysis and judicial review of agency actions under NEPA. The Court deemed these principles necessary in response to decisions by lower federal courts that created requirements beyond those established in NEPA, resulting in fewer projects, delayed projects, unnecessarily expensive projects and fewer jobs. First, Seven County emphasizes that “the central principle of judicial review in NEPA cases is deference.” Unlike when an agency interprets a statute and is due no deference under Loper-Bright, when an agency is exercising discretion granted by statute that agency must have “broad latitude to draw a ‘manageable line’” (quoting Public Citizen). The decision provides clear direction to cease “overly intrusive (and unpredictable) review,” stating that as long as the NEPA review “addresses environmental effects from the project, courts should defer to agencies’ decisions about where to draw the line….” In the Court’s view, this deference is informed by the fact that NEPA is a procedural statute intended to put information before the decisionmaker, not to result in any particular decision. “The bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.”
The Court’s opinion goes on to address the central question — whether NEPA requires the STB to consider “upstream drilling in the Uinta Basin and downstream oil refining along the Gulf Coast.” In answering the question firmly in the negative, the Court explained: “if the project at issue might lead to construction or increased use of a separate project … the agency need not consider the environmental effects of that separate project.” Presumably anticipating future factual applications of this principle, the Court acknowledges that “a new airport may someday lead to a new stretch of highway; a new pipeline to a new power plant; a new housing development to a new subway stop” but the text of NEPA focuses the agency only on the “project at hand” and not the effects “of future or geographically separate projects.” This aspect of the decision has the potential to change agency approach to NEPA review and furthers the administration’s direction in the wake of the withdrawal of the Council on Environmental Quality NEPA regulations.
The Court’s opinion addresses an issue that has been plaguing infrastructure projects in recent years: whether a project’s approval should be vacated for NEPA deficiencies, effectively requiring that the agency start over and the project stop. The Court concluded that “[e]ven if an [environmental impact statement] falls short in some respects, that deficiency may not necessarily require a court to vacate the agency’s ultimate approval of a project, at least absent reason to believe that the agency might disapprove the project if it added more to the [environmental impact statement].” The Court’s conclusion on this issue creates questions surrounding whether federal courts will be able to discern what information might lead the agency to disapprove of the project, and whether courts are qualified to do so.
Justice Sotomayor’s concurring opinion criticizes the majority for engaging in policy analysis but arrives that the same conclusion under prior Supreme Court precedent — that NEPA did not require the STB to analyze the downstream and upstream projects and their effects because the STB’s permitting statute does not allow the Board to reject the railway project because of effects that may be caused by third parties. “NEPA requires consideration of environmental impacts only if such consideration would result in information on which the agency could act.”
In Seven County, the Supreme Court reiterates and expands upon its prior NEPA precedent in an effort to redirect the federal courts and agencies — to reverse the transformation of NEPA “from a modest procedural requirement into a blunt and haphazard tool employed by project opponents … to try to stop or at least slow down new infrastructure and construction projects.” In so doing, the Supreme Court adds support to the substantial changes in NEPA implementation that are ongoing in an eventful year.
Supreme Court Resolves Circuit Split on Wire Fraud and Fraudulent Inducement
The Supreme Court resolved a circuit split on the scope of the federal wire fraud statute, 18 U.S.C. § 1343, in Kousisis v. United States, 605 U.S. ___ (May 22, 2025). The case arose from the Pennsylvania Department of Transportation (PennDOT) soliciting bids for the restoration of historic buildings in Philadelphia. Because the project was funded with federal grant funds, those bidding on the project had to demonstrate that they worked with disadvantaged businesses as defined in federal regulation.
Defendant Alpha Painting and Construction Co. secured the government contracts. Alpha represented in its bid that it would use a disadvantaged business as its supplier. But that representation proved false, and Alpha submitted false documentation to cover up its misrepresentation.
Alpha was charged and convicted of wire fraud. The government’s theory was that Alpha had fraudulently induced the PennDOT to enter into the contract and was therefore guilty of wire fraud. Alpha argued that mere fraudulent inducement was not sufficient to sustain a conviction under the federal wire fraud statute, 18 U.S.C. § 1343. Because it provided value to the government for its services, Alpha contended there was no net pecuniary loss and therefore no criminal fraud. The Supreme Court disagreed.
Wire fraud is committed when the perpetrator uses the wires to defraud the victim of “money or property.” Id. The Court noted that the United States Circuit Courts of Appeal were divided on the question of whether a fraud conviction could stand “when the defendant did not seek to cause the victim net pecuniary loss.” Slip op. at 4.
The Court resolved the split, holding that as long as the defendant “obtained” something through the fraudulent scheme, the statute was satisfied. Id. at 7. Whether the defendant gave something in return, such as the restoration services Alpha provided, was not relevant because “the meaning of ‘obtain’ does not turn on the value of the exchanged items.” Id. at 7-8. The Court said that “a defendant violates § 1343 by scheming to ‘obtain’ the victim’s ‘money or property,’ regardless of whether he seeks to leave the victim economically worse off. A conviction premised on fraudulent inducement thus comports with § 1343.” Id. at 8.
The case is significant because it resolves a circuit split and interprets a widely used federal criminal statute. The decision may also lead to prosecutors’ broader use of the wire fraud statute.
Supreme Court Stays Order That Had Paused Termination of Temporary Protected Status for Venezuelans
On May 19, 2025, the Supreme Court of the United States issued an unsigned order granting the Trump administration’s application to stay a lower court’s order temporarily halting the rescission of Temporary Protected Status (TPS) designation for Venezuela. The Supreme Court’s order allows the administration to resume implementation of rescission actions while court challenges continue through the appeals process.
Quick Hits
The Supreme Court’s stay of a district court order has permitted the Trump administration to resume rescission of the TPS designation for Venezuela, as outlined in Secretary of Homeland Security Kristi Noem’s previous determinations.
Benefits under the 2023 TPS designation for Venezuela may now be subject to revocation, affecting work authorization and protection from removal for Venezuelan TPS beneficiaries; protections under the 2021 TPS designation will remain in place until September 10, 2025.
Although the Supreme Court’s order reinstates the rescission actions, it leaves open the possibility of further legal challenges regarding the validity of immigration documents (i.e., EADs, Forms I-797, Notices of Action, and Forms I-94) issued with October 2, 2026, expiration dates.
Background
The TPS designation provides temporary status to foreign nationals in the United States who are unable to return to their home countries due to an event or circumstance present in those countries. The secretary of homeland security may designate a foreign country for TPS due to temporary conditions such as ongoing armed conflicts, environmental disasters, epidemics, or other extraordinary and temporary conditions that prevent nationals from safely returning to their countries. During the designated TPS period, TPS beneficiaries are protected from removal and may apply for work and travel authorization.
In 2021, Venezuela was initially designated for TPS, and in October 2023, Venezuela was redesignated for TPS—an expansion of the program that provided additional relief for citizens of Venezuela who met qualifying criteria. The 2021 and 2023 designations were most recently extended by the Biden administration for eighteen months, to October 2, 2026.
On January 28, 2025, Secretary of Homeland Security Kristi Noem cancelled the extension of the 2021 and 2023 TPS designations for Venezuela. On February 3, 2025, Secretary Noem terminated the 2023 TPS designation entirely, ending temporary legal protections for beneficiaries under the 2023 designation on April 7, 2025.
On March 31, 2025, Judge Edward Chen of the U.S. District Court for the Northern District of California issued a nationwide order postponing Secretary Noem’s cancellation of the eighteen-month extension for the 2021 and 2023 TPS designations and the termination of the 2023 TPS designation, pending a final decision on the merits in the case. Both the district court and the U.S. Court of Appeals for the Ninth Circuit rejected applications by the Trump administration to stay this temporary order.
Analysis and Impact
The Supreme Court’s order is narrow in scope in that it effectively reverses the lower court’s temporary pause on the rescission of TPS for Venezuela and does not address the merits of the TPS rescission itself.
The U.S. Department of Homeland Security (DHS) may now proceed with its revocation of TPS for Venezuela, as outlined in Secretary Noem’s previous determinations. However, legal challenges to these actions will continue to proceed through the courts and may again reach the Supreme Court to directly decide on the legality of DHS’s actions.
Immediate impacts for TPS Venezuela beneficiaries include the following:
Beneficiaries under the 2023 designation may now be subject to revocation of TPS benefits and removal from the United States.
EADs under the 2023 designation with expiration dates of April 2, 2025, may no longer be valid as proof of work authorization.
Beneficiaries under the 2021 designation continue to have TPS benefits in place through September 10, 2025.
Only EADs under the 2021 designation with expiration dates of September 10, 2025, March 10, 2024, or September 9, 2022, are automatically extended through September 10, 2025.
To the extent that Secretary Noem’s rescission of TPS designation purports to invalidate immigration documents, including EADs, already issued to TPS Venezuela beneficiaries with validity until October 2, 2026, the Supreme Court’s order expressly states that such a purported invalidation remains subject to legal challenge. However, absent further court decisions or DHS policy changes, the prior rescissions of TPS designation for Venezuela are reinstated, and any EADs or other documents with a validity expiration date of October 2, 2026, may no longer be valid.
We expect DHS to provide further clarification as to how it intends to proceed with the implementation of its revocation of TPS for Venezuela, including updated guidance related to I-9 verification.
Janie & Jack’s Alleged CIPA Violations Consolidated, Thus Avoiding Over 2,000 Individual Arbitration Claims
This week, the U.S. District Court for the Northern District of California ruled in favor of children’s clothing retailer Janie & Jack, which sought to enjoin over 2,400 individual arbitration claims resulting from alleged violations of the California Invasion of Privacy Act (CIPA). Now, Janie & Jack will confront a single privacy class action suit as opposed to the more than 2,400 individual arbitration claims by its website visitors.
The parties notified the court of their agreement not to pursue arbitration but to rather proceed through a consolidated class action. Janie & Jack voluntarily dismissed its lawsuit in an attempt to avert the numerous claims by consumers.
Website visitors accused Janie & Jack of violating CIPA and the federal Wiretap Act through its website’s information gathering and tracking practices (also known as trap and trace claims). Janie & Jack alleges that such claims are inadequate because they lack allegations that the consumers created any accounts or conducted any transactions on the website or that Janie & Jack had breached any of its online terms.
Further, although Janie & Jack’s website terms include an arbitration clause, it claimed that the claimants never assented to the contract.
In its response, the retailer emphasized its intent to prevent the growing use of arbitration agreements as “weapons” by plaintiffs’ attorneys, thwarting their intended use of an efficient, effective, and timely progression of claims.
This case highlights a common practice: thousands of individuals, all represented by the same counsel, simultaneously file, or threaten to file, arbitration demands with nearly identical claims.
These allegations mark yet another instance of the growing trend of the plaintiffs’ bars’ push for “trap and trace” claims because they can leverage existing wiretap laws (particularly in California under CIPA) to argue that common online tracking technologies like cookies, pixels, and website analytics tools essentially function as trap and trace devices, allowing them to file complaints against companies for collecting user data without proper consent, even though these technologies were originally designed for traditional phone lines, not the internet, opening up a large pool of potential plaintiffs and potentially significant damages.
If you haven’t heard it enough, here it is again: NOW is the time to assess your website’s online trackers and update your cookie consent management platform, website privacy policy, and consumer data collection processes.
This article was co-authored by Mark Abou Naoum
Federal Court Strikes Down IEEPA Tariffs
On May 28, 2025, a three-judge panel of the U.S. Court of International Trade (CIT) unanimously struck down the extensive tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). The CIT held that the imposition of the tariffs exceeded the authority granted to the President by Congress under IEEPA. The Court issued a permanent injunction blocking the administration from enforcing the IEEPA tariffs, and ordered the administration to issue the necessary administrative orders within 10 days to end them.
The affected tariffs are the 10% tariff on goods of most countries (referred to by the Court as the Worldwide and Retaliatory Tariffs), the 25% border tariffs on goods of Canada and Mexico in response to the illicit drug trade, and the 20% tariff on goods of China (together referred to by the Court as the Trafficking Tariffs). The affected Executive Orders (EOs) are as follows: 14257,[i] 14259,[ii] 14266,[iii] and 14298.[iv]
The government has appealed the case to the U.S. Court of Appeals for the Federal Circuit.
The CIT’s Ruling
In its opinion, the CIT emphasized that the U.S. Constitution expressly assigns the power to impose tariffs to Congress under Article I, Section 8, Clause 1, and that any grant of authority by Congress to the president to impose tariffs must be construed narrowly.
The Court held that IEEPA does not allow the Executive Branch to unilaterally impose tariffs without clear and bounded statutory authority. Instead, the Court read IEEPA as imposing two key limits on the tariffs:
Section 1702 of IEEPA, which permits the President to “regulate . . . importation,” must be construed narrowly. The Court examined the legislative history of this provision, which replaced a very broad grant of authority under the older Trading with the Enemy Act with a much narrower authority. The Court thus held that IEEPA does not authorize broad, unbounded tariffs like the Worldwide and Retaliatory Tariff Orders. The absence of “any identifiable limits” rendered these measures beyond the scope of the statute. Rather, the CIT determined that the Worldwide and Retaliatory Tariffs, which were imposed in response to the trade deficit, must conform within the limits of Section 122 of the Trade Act of 1974, the statutory authority that deals with remedies for balance-of payments deficits.
Section 1701(b) of IEEPA limits the President’s authority to actions that “deal with an unusual and extraordinary threat” and prohibits the use of IEEPA “for any other purpose.” The Trafficking Tariffs were implemented to encourage foreign countries to arrest or detain bad actors responsible for the flow of illicit drugs into the United States. The Court determined that the Trafficking Tariffs failed to satisfy the statutory threshold, because the tariffs do not bear a sufficient connection to the alleged threat to constitute “dealing with” the identified threat.
What’s Next
The CIT’s judgment permanently enjoined the IEEPA tariffs and ordered that within 10 days necessary administrative orders be issued to effectuate the permanent injunction.
The U.S. Department of Justice (DOJ) immediately appealed the ruling to the Federal Circuit Court of Appeals. The DOJ also submitted to the CIT a motion to stay enforcement of the judgment pending appeal. If the CIT grants the stay, the IEEPA tariffs would remain in place during the appeal.
If the CIT does not grant the stay, the DOJ will likely seek to stay the CIT’s permanent injunction in its appeal.
Importers should also note that the Trump Administration’s tariffs imposed under different statutory authorities (such as the duties on steel, aluminum, automobiles, and automobile parts issued pursuant to Section 232 of the Trade Expansion Act of 1962 and the duties on certain Chinese goods issued pursuant to Section 301 of the Trade Act of 1974) are not affected by the CIT’s ruling, and remain in effect.
We also note that even if its appeal is unsuccessful and the CIT’s order terminating the IEEPA tariffs is upheld, nothing stops the Trump Administration from pursuing more tariffs under Sections 122, 232, 301, or 338 of other relevant trade acts. We will continue to keep an eye on developments and keep you informed here.
FOOTNOTES
[i] Executive Order 14257, Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits, 90 Fed. Reg. 15041 (Apr. 2, 2025).
[ii] Executive Order 14259, Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports From the People’s Republic of China, 90 Fed. Reg. 15509 (Apr. 8, 2025).
[iii] Executive Order 14266, 90 Fed. Reg. at 15626 (raising China-specific duty rate from 84 to 125 percent effective April 10).
[iv] Executive Order 14298, Modifying Reciprocal Tariff Rates To Reflect Discussions With the People’s Republic of China, 90 Fed. Reg. 21831 (May 12, 2025).
Matthew Floyd contributed to this article
Federal Court Halts Broad Swath of Tariffs, Ruling Trump Lacks Authority Under IEEPA
On May 28, 2025 the little-known federal Court of International Trade issued its ruling in two challenges — one brought by 12 states attorneys general and one by private companies — to President Trump’s authority to issue tariffs using the International Emergency Economic Powers Act (IEEPA).
No prior president has used IEEPA to support tariffs, as IEEPA has historically been viewed as only a sanctions authority. In a unanimous per curiam opinion, the three-judge panel of the court invalidated using IEEPA to support tariffs under Article I, Section 8, clauses 1 and 3 of the Constitution, which assign to Congress “the exclusive powers to ‘lay and collect Taxes, Duties, Imposts, and Excises’ and to ‘regulate Commerce with foreign Nations.’”
After an extensive review of Congress’ delegation of trade authorities dating back to 1916, the court quotes IEEPA’s provision that its “authorities ‘may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared… and may not be exercised for any other purpose.’” The court held that IEEPA does not delegate Congress’ power to the President “in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.”
Concluding that IEEPA does not authorize any of the “Worldwide, Retaliatory, or Trafficking Tariff Orders,” the court found that narrowly tailored relief was inappropriate as “if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all.”
As a result, the challenged orders were permanently enjoined nationwide, allowing 10 calendar days for orders to be issued. The Trump Administration immediately filed for a motion to stay and appealed the order to the Court of Appeals for the Federal Circuit. The ruling halts the collection of the duties that were based on IEEPA under Executive Orders 14193, 14194, 14195 (the “Trafficking Tariffs”), and 14257 (the “Worldwide and Retaliatory Tariffs”) and all their amendments.
The “Trafficking Tariffs” are those imposed on Canada, Mexico, and China and the “Worldwide and Retaliatory Tariffs” are the global 10% ad valorem and the “reciprocal” global tariff schedule. It also reinstates de minimis treatment for shipments valued at less than $800. The ruling may also require refunding tariffs already paid.
Tariffs based on other authorities, including Section 232 tariffs on automobiles, aluminum, and steel, and Section 301 tariffs on China, remain in effect.
The ruling will likely throw a wrench into ongoing trade negotiations with dozens of countries, even while it is under appeal. In addition to the substantive ruling on IEEPA authority, both the nationwide injunction and the request for a stay pending appeal could make their way swiftly to the Supreme Court’s so-called “shadow docket” for emergency relief.
In addition, Congress may seek to ratify the tariffs, or the administration may seek to reinstate the tariffs using other delegated authorities. The ruling is unlikely to bring an end to the volatility that has surrounded the tariffs since they were imposed in April, and long-term planning around tariffs will continue to be challenging.
A Rhode Island Town Seized 31 Acres by Eminent Domain Without Telling the Owners—Their Recent Lawsuit Claims It’s an Unconstitutional “Sham Taking”
A family of developers learned that the town of Johnston, Rhode Island, had seized 31 acres of their land through a social media post. They now claim the takeover was a sham designed to block much-needed affordable housing, in a case that could test the limits of eminent domain.
The owners had planned to develop the land into a 255-unit affordable housing project under Rhode Island’s Low and Moderate Income Housing Act. But after a contentious town meeting last December, Johnston Mayor Joseph Polisena, Jr., vowed to stop the project, calling it “destructive.” In January, he announced plans to seize the land by eminent domain and build a town hall complex on the site. The next day, the town council unanimously approved the seizure.
It wasn’t until mid-March that the owners learned Mayor Polisena had followed through with his plan. That’s when the town’s attorney filed a petition in Rhode Island Superior Court to take title to the property—apparently without notifying the owners. Two days later, the attorney sent a letter demanding they vacate and threatening a no-trespass order. But by then, the owners had already heard about the taking, which Polisena announced on social media. They promptly filed suit.
Federal law gives municipalities like Johnston broad powers to seize land, but that power is not unlimited. Eminent domain applies only if property is taken for “public use.” Since the Supreme Court’s highly debated Kelo decision, however, “public use” has been broadly defined to include any seizure that benefits the public welfare. In response, many states passed limits on the meaning of public use and the evidence required to justify a taking. Rhode Island is among them.
Rhode Island law currently limits the scope of “public use” takings for economic development through the Home and Business Protection Act. At least 46 other states have similar laws that restrict municipalities’ power to take property without just cause. And as a matter of practice, eminent domain is often a town’s last resort. But, the owners’ request for relief claims the town is “doing this in reverse” and “even now has not complied” with the Rhode Island statute.
In late March, the U.S. District Court for the District of Rhode Island issued a temporary restraining order against the town, prohibiting it from acting on the land while the owners’ request for a preliminary injunction was pending. In their filings, the owners accused Johnston of constitutional and statutory violations, claiming that the seizure amounts to a “sham taking.”
The owners’ lawsuit comes as part of a larger fight over affordable housing in New England and beyond. According to the complaint, Polisena’s plans for a new municipal complex are merely a pretext to block “desperately needed affordable homes.” In Rhode Island alone, the median home price is nearly $500,000, leading Gov. Dan McKee in 2024 to declare a “housing crisis.”
Currently, only the owners’ federal case is pending, as they voluntarily dismissed their case in Superior Court. In April 2025, the District of Rhode Island granted a preliminary injunction, which will remain until the parties resolve the case or the town decides not to pursue the taking.
No Fairytale Ending for Consumer Opposition: RAPUNZEL Reinforces Lexmark Standing Limits
The US Court of Appeals for the Federal Circuit affirmed the Trademark Trial & Appeal Board’s dismissal of a trademark opposition brought by a consumer, holding that mere consumer interest is insufficient to establish standing under Section 13 of the Lanham Act (15 U.S.C. § 1063). The ruling reinforced the application of the Supreme Court’s Lexmark (2014) framework to administrative trademark proceedings and clarified that only parties with commercial interest fall within the “zone of interests” protected by the statute when challenging a mark. Curtin v. United Trademark Holdings, Inc., Case No. 23-2140 (Fed. Cir. May 22, 2025) (Taranto, Hughes, JJ.; Barnett, Distr. J., sitting by designation.)
United Trademark Holdings (UTH) applied to register the mark RAPUNZEL for dolls and toy figures. Rebecca Curtin, a law professor, doll collector, and mother, opposed the registration, arguing that “Rapunzel” is a generic or descriptive term and its registration would harm consumers by reducing competition and increasing prices for fairytale-themed dolls.
The Board dismissed Curtin’s opposition, concluding she lacked standing to oppose under § 1063. The Board applied the Lexmark framework, which requires a showing that the opposer’s interests fall within the zone of interests protected by the statute and that the alleged injury is proximately caused by the registration. The Board found that Curtin, as a consumer, failed both prongs. Curtin appealed.
Curtin argued she had statutory entitlement under the 1999 Federal Circuit decision in Ritchie v. Simpson, “a case that addressed a section of the Trademark Act barring registration of ‘immoral’ or ‘scandalous’ matter.”
The Federal Circuit affirmed the Board, holding that the Lexmark framework applied rather than Ritchie. The Court explained that while the Lanham Act may indirectly benefit consumers, the statutory cause of action is reserved for those with commercial interest. Since Curtin’s opposition was based on claims that the mark was generic, descriptive, or failed to function as a mark, her interest as a consumer did not fall within the zone of interests protected by the statute.
The Federal Circuit also found that Curtin’s alleged injuries, namely reduced marketplace competition, increased prices, and diminished access to diverse interpretations of the Rapunzel character, were too speculative and derivative of harm that might be suffered by commercial competitors. The Court reiterated that injuries must be direct and not merely downstream effects of harm to others. Curtin’s submission of a petition with more than 400 signatures from like-minded consumers did not alter the Court’s conclusion that her alleged harm was too remote to satisfy the proximate cause requirement.
Practice Note: The Federal Circuit’s decision reinforces that only parties with direct commercial stakes, such as competitors or potential market entrants, have standing to oppose trademark registrations on grounds such as genericness, descriptiveness, or fraudulence.
It’s a Matter of Timing: The PTO’s Latest Decisions on Discretionary Denials
Since the US Patent & Trademark Office’s (PTO) decision to rescind former Director Vidal’s memo on procedures for post-grant proceedings where there is parallel district court litigation, Current Acting Director Coke Morgan has issued four decisions regarding requests for discretionary denials:
Twitch Interactive, Inc. v. Razdog Holdings LLC, IPR2025-00307; 00308, Paper 18 (P.T.A.B. May 16, 2025)
Amazon.com v. NL Giken, Inc., IPR2025-00250; 00407, Paper 14 (P.T.A.B. May 16, 2025)
Arm Ltd. and Mediatek, Inc. v. Daedalus Prime LLC, IPR2025-00207, Paper 10 (P.T.A.B. May 16, 2025)
Ericsson and Verizon Wireless v. Procomm International, IPR2024-01455, Paper 15 (P.T.A.B. May 16, 2025).
The Director ultimately granted two of the requests and denied the other two.
In Twitch Interactive v. Razdog Holdings LLC, the PTO denied the patent owner’s request for discretionary denial. The parallel district court proceeding did not have a scheduled trial date, and the projected trial date was far beyond the PTO’s final written decision date. The petitioner also provided statistical evidence that the district court would likely issue a stay for the pending inter partes review (IPR) proceeding. Therefore, based on a holistic assessment of the evidence presented, the PTO denied the request for discretionary denial.
In Amazon.com v. NL Giken, Inc, the PTO similarly denied the patent owner’s request for discretionary denial. Here, the issue date for the PTO’s final written decision fell before the parallel district court trial date. The abundance of time between the dates ultimately led to the PTO’s denial.
In contrast, in Arm Ltd. and Mediatek, Inc. v. Daedalus Prime LLC, the PTO granted the patent owner’s request for discretionary denial. The PTO highlighted that it was unlikely that its final written decision would be issued before the start of the district court trial. There also was a lack of probative evidence that the district court would issue a stay if an IPR proceeding was instituted.
Finally, in Ericsson and Verizon Wireless v. Procomm International, the PTO granted the patent owner’s request for discretionary denial. The PTO found that the district court trial would conclude before a final written decision was issued in the IPR proceedings, because the trial date preceded the final written decision date by nine months. Moreover, there was no evidence to support any contention that the district court would issue a stay.
Practice Note: These four decisions emphasize the importance of timing between post-grant proceedings and parallel district court litigation. The PTO is more likely to grant discretionary denial if the final written decision of the post-grant proceeding is issued after the trial concludes in the parallel district court action. If a final written decision is likely to be issued before the trial begins in the parallel proceeding, the PTO is more likely to deny a request for a discretionary denial.
2025 Review of AI and Employment Law in California
California started 2025 with significant activity around artificial intelligence (AI) in the workplace. Legislators and state agencies introduced new bills and regulations to regulate AI-driven hiring and management tools, and a high-profile lawsuit is testing the boundaries of liability for AI vendors.
Legislative Developments in 2025
State lawmakers unveiled proposals to address the use of AI in employment decisions. Notable bills introduced in early 2025 include:
SB 7 – “No Robo Bosses Act”
Senate Bill (SB) 7 aims to strictly regulate employers’ use of “automated decision systems” (ADS) in hiring, promotions, discipline, or termination. Key provisions of SB 7 would:
Require employers to give at least 30 days’ prior written notice to employees, applicants, and contractors before using an ADS and disclose all such tools in use.
Mandate human oversight by prohibiting reliance primarily on AI for employment decisions such as hiring or firing. Employers would need to involve a human in final decisions.
Ban certain AI practices, including tools that infer protected characteristics, perform predictive behavioral analysis on employees, retaliate against workers for exercising legal rights, or set pay based on individualized data in a discriminatory way.
Give workers rights to access and correct data used by an ADS and to appeal AI-driven decisions to a human reviewer. SB 7 also includes anti-retaliation clauses and enforcement provisions.
AB 1018 – Automated Decisions Safety Act
Assembly Bill (AB) 1018 would broadly regulate development and deployment of AI/ADS in “consequential” decisions, including employment, and possibly allow employees to opt out of the use of a covered ADS. This bill places comprehensive compliance obligations on both employers and AI vendors—requiring bias audits, data retention policies, and detailed impact assessments before using AI-driven hiring tools. It aims to prevent algorithmic bias across all business sectors.
AB 1221 and AB 1331 – Workplace Surveillance Limits
Both AB 1221 and AB 1331 target electronic monitoring and surveillance technologies in the workplace. AB 1221 would obligate employers to provide 30 days’ notice to employees who will be monitored by workplace surveillance tools. These tools include facial, gait, or emotion recognition technology, all of which typically rely on AI algorithms. AB 1221 also describes procedures and requirements for any analyzing vendor’s storage and usage of data collected by such a tool. AB 1331 more broadly restricts employers’ use of tracking tools—from video/audio recording and keystroke monitoring to GPS and biometric trackers—particularly during off-duty hours or in private areas.
Agency and Regulatory Guidance
CRD – Final Regulations on Automated Decision Systems
On 21 March 2025, California’s Civil Rights Council (part of the Civil Rights Department (CRD)) adopted final regulations titled “Employment Regulations Regarding Automated-Decision Systems.” These rules, which could take effect as early as 1 July 2025, once approved by the Office of Administrative Law, explicitly apply existing anti-discrimination law (the Fair Employment and Housing Act (FEHA)) to AI tools.
Key requirements in the new CRD regulations include:
Bias Testing and Record-Keeping
Employers using automated tools may bear a higher burden to demonstrate they have tested for and mitigated bias. A lack of evidence of such efforts can be held against the employer. Employers must also retain records of their AI-driven decisions and data (e.g., job applications, ADS data) for at least four years.
Third-Party Liability
The definition of “employer’s agent” under FEHA now explicitly encompasses third-party AI vendors or software providers if they perform functions on behalf of the employer. This means an AI vendor’s actions (screening or ranking applicants, for example) can legally be attributed to the employer—a critical point aligning with recent caselaw (see Mobley lawsuit below).
Job-Related Criteria
If an employer uses AI to screen candidates, the criteria must be job-related and consistent with business necessity, and no less-discriminatory alternative can exist. This mirrors disparate-impact legal tests, applied now to algorithms.
Broad Coverage of Tools
The regulations define “Automated-Decision System” expansively to include any computational process that assists or replaces human decision-making about employment benefits, which covers resume-scanning software, video interview analytics, predictive performance tools, etc.
Once in effect, California will be among the first jurisdictions with detailed rules governing AI in hiring and employment. The CRD’s move signals that using AI is not a legal shield and that employers remain responsible for outcomes and must ensure their AI tools are fair and compliant.
AI Litigation
Mobley v. Workday, Inc., currently pending in the US District Court for the Northern District of California, illustrates the litigation risks of using AI in hiring. In Mobley, a job applicant alleged that Workday’s AI-driven recruitment screening tools disproportionately rejected older, Black, and disabled applicants, including himself, in violation of anti-discrimination laws. In late 2024, Judge Rita Lin allowed the lawsuit to proceed, finding the plaintiff stated a plausible disparate impact claim and that Workday could potentially be held liable as an “agent” of its client employers. This ruling suggests that an AI vendor might be directly liable for discrimination if its algorithm, acting as a delegated hiring function, unlawfully screens out protected groups.
On 6 February 2025, the plaintiff moved to expand the lawsuit into a nationwide class action on behalf of millions of job seekers over age 40 who applied through Workday’s systems since 2020 and were never hired. The amended complaint added several additional named plaintiffs (all over 40) who claim that after collectively submitting thousands of applications via Workday-powered hiring portals, they were rejected—sometimes within minutes and at odd hours, suggestive of automated processing. They argue that a class of older applicants were uniformly impacted by the same algorithmic practices. On 16 May 2025, Judge Lin preliminarily certified a nationwide class of over-40 applicants under the Age Discrimination in Employment Act, a ruling that highlights the expansive exposure these tools could create if applied unlawfully. Mobley marks one of the first major legal tests of algorithmic bias in employment and remains the nation’s most high-profile challenge of AI-driven employment decisions.
Conclusion
California is moving toward a comprehensive framework where automated hiring and management tools are held to the same standards as human decision-makers. Employers in California should closely track these developments: pending bills could soon impose new duties (notice, audits, bias mitigation) if enacted, and the CRD’s regulations will make algorithmic bias expressly unlawful under FEHA. Meanwhile, real-world litigation is already underway, warning that both employers and AI vendors can be held accountable when technology produces discriminatory outcomes.
The tone of regulatory guidance is clear that embracing innovation must not sacrifice fairness and compliance. Legal professionals, human resources leaders, and in-house counsel should proactively assess any AI tools used in recruitment or workforce management. This includes consulting the new CRD rules, conducting bias audits, and ensuring there is a “human in the loop” for important decisions. California’s 2025 developments signal that the intersection of AI and employment law will only grow in importance, with the state continuing to refine how centuries-old workplace protections apply to cutting-edge technology.
ITS HERE: The First of a Wave of New “Keyword Avoider” SMS Opt Out TCPA Class Actions Has Been Filed and TCPAWorld Will Never Be the Same
An attorney named Jeff Lohman recently narrowly escaped a jury verdict against him on a RICO claim arising out of allegations he had manufactured TCPA claims by encouraging clients to use vague opt out language during phone calls with Navient.
With the FCC’s recent revocation rules now in effect– requiring callers and texters to honor freeform opt out requests— we can expect to see a similar phenomenon. And the first of these cases seem to be rolling in.
The new FCC rules say callers must honor phrases like “stop” and “unsubscribe” but also leave the door open for consumers to opt out in “any reasonable means” that convey a clear intent for calls or texts to stop. The Commission’s ruling is clear that consumers are NOT limited to using just a few key words to opt out.
Yet any businesses– who do not follow TCPAWorld.com ;)– have failed to heed the message (ha) and continue to use SMS settings that can detect only keyword opt out requests.
That’s not going to fly anymore folks.
For instance in a new TCPA class action against American First Finance, the consumer responded with the message “Cease and Desist All Communication.”
Notice that this is a pretty clear request for calls and texts to stop when read by a human but a company’s SMS provider’s software is unlikely to flag this phrase.
And allegedly American First continued to send SMS messages to the consumer leading to a big fat class action here in California.
Now one point of interest, the Plaintiff does not appear to be within his own class definition. The class reads:
All persons within the United States who, within the four years prior to the filing of this lawsuit through the date of class certification, received two or more text messages within any 12-month period, from or on behalf of Defendant, regarding Defendant’s goods, services, or properties, to said person’s residential cellular telephone number, after communicating to Defendant that they did not wish to receive text messages by replying to the messages with a “stop” or similar opt-out instruction.
To my eye “cease and desist all communication” is not “similar” to the elegant “Stop” request we all know and love. But that’s for the court to determine I suppose.
Pretty clear bottom line here– I expect to see a TON of TCPA class actions rolling in focused on companies that might be heeding perfect stop requests but that are missing free form communications received via their SMS channel. HUGE mistake.
These requests need to be heeded and honored– and starting next April need to be treated as complete opt outs across all channels and all purposes.
Complaint here: predocketComplaintFile (22)
Stylish but Generic: ‘VETEMENTS’ Can’t Dress Up as Trademark
The US Court of Appeals for the Federal Circuit affirmed the Trademark Trial & Appeal Board’s refusal to register the mark VETEMENTS for clothing and related retail services, finding that the mark was generic under the doctrine of foreign equivalents. In re Vetements Group AG, Case Nos. 2023-2050; -2051 (Fed. Cir. May 21, 2025) (Prost, Wallach, Chen, JJ.)
Vetements Group AG applied to register the mark VETEMENTS for various clothing items and online retail store services for clothing items. The US Patent & Trademark Office refused registration, finding the mark generic or, in the alternative, merely descriptive without acquired distinctiveness under Section 2(e)(1) of the Lanham Act. The Board affirmed, applying the doctrine of foreign equivalents to translate “vetements” (French for “clothing”) and concluding that the term was generic for the applied-for goods and services pertaining to clothing. Vetements Group appealed.
The doctrine of foreign equivalents is used to evaluate whether a non-English trademark is generic or descriptive for the applied-for goods or services by translating the foreign-language mark into English, then applying the relevant legal tests. The Federal Circuit affirmed that the doctrine applies when the “ordinary American purchaser” would likely “stop and translate” the foreign word into English. The “ordinary American purchaser” includes all US consumers, including those familiar with the foreign language.
The Federal Circuit emphasized that words from modern languages are generally translated unless there is a compelling reason not to do so. It rejected Vetements’ argument that the doctrine should only apply if a majority of US consumers understand the foreign word. Instead, the Court held that it is sufficient if an “appreciable number” of US consumers would recognize and translate the term.
In this case, the Federal Circuit found that French is widely spoken and taught in the United States (the Board found that as of 2010, French was the fifth most spoken non-English language at home and the second most widely taught non-English language in US schools). The Court thus concluded that “vetements” is a common French word meaning “clothing,” and that given the mark’s use on apparel and in connection with clothing-related retail services, translation of the term into English was likely.
Under the doctrine of foreign equivalents, foreign terms used as trademarks are translated into English, then evaluated under the applicable standards, including genericness, descriptiveness, and likelihood of confusion. In assessing whether a term is generic, courts apply a two-part test: identifying the genus of goods or services at issue, and determining whether the relevant public understands the term primarily to refer to that genus.
Here, the genus was clothing and online retail services for clothing. The Federal Circuit agreed with the Board that “vetements,” once translated to “clothing,” directly named the genus of the goods and services. Therefore, the term was generic and ineligible for trademark protection.
Because the mark was found to be generic, the Federal Circuit explained that it did not have to reach the Board’s alternative holding that the VETEMENTS mark was merely descriptive without acquired distinctiveness or secondary meaning. The Court nonetheless stated that it saw no error in the Board’s reasoning that the generic and descriptive nature of the mark prevented it from acquiring distinctiveness, and the Court affirmed the Board’s refusal to register the mark.