EPA, NGOs Continue Aggressive TSCA Enforcement with a Focus on Chemical Reporting Violations
Despite broad shifts in enforcement priorities across the federal government, the US Environmental Protection Agency (EPA) continues to pursue aggressive enforcement of Toxic Substances Control Act (TSCA) violations. Actions taken by EPA in 2025 to date demonstrate sustained TSCA enforcement, including with respect to chemical regulations and particularly chemical data reporting requirements. Environmental non-governmental organizations (NGOs) are also utilizing TSCA’s Section 20 citizen suit authority to bring lawsuits against companies over alleged reporting noncompliance as well. Chemical manufacturers and importers should stay apprised of these enforcement trends and proactively manage their TSCA compliance strategies to reduce enforcement and litigation risk.
EPA Enforcement in 2025
While the government has scaled back civil environmental enforcement in federal court, EPA’s administrative enforcement remains robust and appears to be accelerating. In the third quarter of calendar year 2025, EPA resolved 198 administrative enforcement actions across the statutes it administers—up from 179 case conclusions in the second quarter—and has assessed over $9 million in penalties. Although many of these cases likely were initiated during the prior administration, the continued settlement approvals reflect EPA’s focus on “core” enforcement work under the current administration.
EPA’s TSCA enforcement and compliance assurance program includes four key focus areas: new and existing chemicals, polychlorinated biphenyls (PCBs), asbestos, and lead-based paint. From time to time, aspects of the TSCA enforcement program have been included amongst EPA’s national focus areas, as reflected in the National Enforcement and Compliance Initiatives that EPA selects on four-year cycles. TSCA enforcement largely is, however, part of “core” enforcement work, which Administrator Zeldin has made a priority for the agency.
Since the beginning of the current administration, EPA has pursued 115 new administrative enforcement actions and assessed approximately $4.3 million in penalties for TSCA violations. The vast majority of these cases (about 80 percent) concern lead-based paint regulation noncompliance, which have generally resulted in lower penalty assessments than chemicals enforcement actions. Of the ten largest TSCA penalties assessed this year to date, five were for chemicals enforcement actions. For example, the agency assessed its single largest TSCA penalty in 2025—$700,000—for violations of the TSCA Chemical Data Reporting (CDR) rule, where the respondent allegedly failed to report 334 imported chemicals for the 2024 reporting cycle. EPA assessed six‑figure penalties in three other CDR rule enforcement actions—$415,000, $393,000, and $112,155—as well as a $100,000 penalty for alleged violations of the methylene chloride risk management rule for paint removers.
NGO Lawsuits to Enforce TSCA CDR Violations
TSCA Section 20 also gives private citizens the authority to bring civil actions against companies in federal court for TSCA violations. TSCA allows private citizens to bring such suits so that a court can restrain the identified TSCA violations or compel EPA to enforce the law. Since 2021, NGOs have filed TSCA Section 20 actions against companies for alleged CDR violations and continue to do so with growing frequency. Two of the most recent lawsuits were filed earlier this fall by the NGO Center for Environmental Health (CEH). CEH alleged that certain chemical companies failed to report imported chemicals to EPA for the 2020 CDR reporting cycle.
The complaints in these cases detail how the NGOs identify potential violations by reviewing information on company imports and manufactured chemicals published in EPA’s CDR public database. NGOs have also asked the courts in these cases to 1) declare the companies violated TSCA, 2) order the companies to file corrected CDR reports with EPA, 3) restrain the companies from ongoing CDR violations, 4) order that the companies audit their manufacturing and import activities to identify other potential CDR violations, and 5) pay the NGO’s attorneys’ fees. Even when penalties are not imposed, responding to TSCA Section 20 claims can be costly and require the diversion of resources away from other business functions.
Companies should be aware of these types of civil actions because they can open the door to NGOs or other private citizens to pressure companies, as part of settlements, to agree to allow them to participate in company-led TSCA CDR (or broader) audits, which could potentially reveal additional TSCA violations.
What Companies Should Do
EPA administrative enforcement and citizen-filed lawsuits represent two significant legal risks for chemical manufacturers and importers subject to TSCA CDR rule requirements. Noncompliance can result in not only steep penalties but also business operational disruption. On the front end, manufacturers and importers should routinely review their own TSCA compliance programs and audit their own TSCA reporting compliance, which can also position companies to take advantage of EPA’s Audit Policy[1] where its conditions are met, potentially mitigating penalties for voluntarily disclosed noncompliance. Companies should also proactively prepare for the next CDR reporting cycle in 2028. Companies should also engage counsel early when responding to EPA inquiries or enforcement activity or notice of citizen lawsuits.
[1] U.S. EPA, “Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations,” 65 Fed. Reg. 19,618 (Apr. 11, 2000).
Franchisee’s Breach of Contract Claims Dismissed for Lack of Standing as Third-Party Beneficiary
A federal court recently granted a third-party supplier’s motion to dismiss a franchisee’s lawsuit, holding that the franchisee was not an intended third-party beneficiary of the contract between the supplier and the franchisor.
Background
In Belvidere Pizza, Inc. v. McCain Foods USA, Inc., Hampshire Pizza, Inc. (“Hampshire”) was the franchisor of various pizza restaurants and provided franchisee support, including purchasing and contracting services on their behalf. Belvidere Pizza, Inc. (“Belvidere”) was a Hampshire franchisee.
In 2022, Hampshire entered a Food Service Contract with McCain Foods USA, Inc. (“McCain”), a food supplier. The contract required McCain to provide Hampshire with at least 90 days’ written notice before increasing prices. The underlying dispute arose when, a few months into the contract, McCain raised its prices and provided Hampshire with only six days’ notice.
As a result, Hampshire and Belvidere jointly filed a class action suit in the U.S. District Court for the Northern District of Illinois against McCain on behalf of all parties who had paid a price increase under a contract containing the 90-day notice term. They alleged that although Belvidere was not a party to the contract, it was intended “for the direct benefit of third parties, namely the members/franchisees.” Subsequently, McCain moved to dismiss Belvidere’s claims, arguing that Belvidere was not an intended third-party beneficiary under the contract.
The Court Granted the Supplier’s Motion to Dismiss the Franchisee Lawsuit
The Court granted the motion to dismiss. Illinois law imposes a “strong presumption against conferring contractual benefits on noncontracting third parties.” In other words, for a noncontracting party to hold either party of a contract liable for its breach, the contract must contain express language identifying the third party or the specific class to which they belong. It is insufficient that the contracting parties merely “knew, expected, or intended that others would benefit from the agreement.”
Because Belvidere was not a party to the contract, and the contract did not reference its franchise or otherwise establish that Belvidere was intended to benefit, the Court dismissed all of Belvidere’s claims against McCain.
Alternatively, Belvidere argued that there was an implied contract between itself and McCain and claimed entitlement to recovery under unjust enrichment. However, the Court did not reach the merits of this argument because Belvidere improperly pled unjust enrichment by “referencing the existence of a contract” in its claim. Illinois law does not allow for a plaintiff to incorporate by reference prior allegations of the existence of a contract in support of a claim for unjust enrichment.
Key Takeaway
This case highlights an important point for parties contracting in Illinois: courts will not confer contractual rights on someone who is not a party to the contract, unless there is clear and express language identifying the party and establishing that the contract was intended for its benefit. Therefore, franchisors who intend for their franchisees to have enforceable rights under contracts negotiated on their behalf should ensure the contract explicitly names or clearly describes those franchisees.
SILENT SWITCH? New Lawsuit Alleges Google Uses Gemini AI to “Secretly” Read Gmail, Chat, and Meet Conversations
The latest in a spate of lawsuits targeting AI tools, a new putative class action filed in the Northern District of California alleges that tech giant Google activated its Gemini AI features across its portfolio of services without obtaining user consent, in violation of the California Invasion of Privacy Act (“CIPA”).
According to the complaint, Google previously offered Gemini “Smart features” as an opt-in tool, but allegedly switched this setting on for all Gmail, Chat, and Meet accounts on or around October 10, 2025, enabling its AI to track users’ private communications in those platforms without knowledge or consent in violation of CIPA Section 632, which prohibits the recording of confidential communications without consent. The filing states that Google tracks these private communications with Gemini by default, requiring users to affirmatively find this data privacy setting and shut it off, despite never “agreeing” to such AI tracking in the first place. The complaint alleges that despite this setting being in default “opt out” status since October 10, the setting is still worded as an “opt in” feature: “When you turn this setting on, you agree . . .” According to the complaint, this renders the privacy settings offered by Google effectively meaningless.
The plaintiff, Thomas Thele, alleges he did not turn on this setting, was not notified of the change, and did not consent to the collection or analysis of information contained in his communications. While Thele does not identify the precise Gmail, Chat, and/or Meet communications that he sent or received with the “Smart features” setting turned on, the complaint identifies the categories of information that could allegedly be derived from these communications, including financial records, employment information, medical information, political and religious affiliations, the identities of family members and contacts, and social habits and activities,.
Plaintiff purports to represent the following potentially massive class: “All natural persons residing in the United States with Google accounts whose private communications in Gmail, Chat, and/or Meet were tracked by Google’s Gemini AI after Google turned on “Smart features” in those persons’ data privacy account settings.”
In response to viral social media posts accusing Google of automatically opting Gmail users into AI model training through its “smart features,” Google has issued a statement refuting claims that it uses Gmail content to train the Gemini AI model. However, the sufficiency and truth of Plaintiff Thele’s allegations are yet to be tested. We’ll keep a close eye on this one.
The case is Thele v. Google, LLC, No. 5:25-CV-09704 (N.D. Cal. Nov. 11, 2025).
New Inventorship Guidance on AI-Assisted Inventions- AI Can’t Be an Inventor, But AI Can Be a Tool in the Inventive Process (For Now…)
As readers may recall, in February 2024, the USPTO issued guidance on inventorship in AI-assisted inventions, which we wrote about here. On November 26, 2025, the USPTO rescinded that guidance and replaced it with new guidance.
By way of background, the February 2024 Guidance analyzed the naming of inventors for AI-assisted inventions using the Pannu factors, which state that an inventor must (1) contribute in some significant manner to the conception or reduction to practice of an invention, (2) make a contribution to the claimed invention that is not insignificant in quality when measured against the full invention, and (3) do more than merely explain well-known concepts and/or the current state of the art. In the February 2024 Guidance, the USPTO noted that in the context of AI-assisted inventions, the Pannu factors were informed by the following considerations:
Use of an AI system in creating an AI-assisted invention does not categorically negate the natural person’s contributions as an inventor, if the natural person “contributes significantly” to the invention
Providing a recognized problem or a general goal or research plan to an AI system does not rise to the level of conception
Reduction of the output of an AI system to practice alone is not a significant contribution that rises to the level of inventorship
A natural person who designs, builds, or trains an AI system in view of a specific problem to generate a particular solution could be an inventor
Owning or overseeing an AI system used in the creation of an invention does not constitute a significant contribution to conception
The November 2025 Guidance withdraws the analysis of the Pannu factors, indicating that the Pannu factors only apply when determining when multiple natural persons qualify as inventors. The November 2025 Guidance further emphasizes that the same legal standard for determining inventorship applies, whether or not AI systems were used in the inventive process. AI systems are described as tools, analogous to laboratory equipment, computer software, research databases, and the like. And under well-established practice, inventors can use the services of others – including AI systems – without those sources becoming co-inventors.
This Guidance significantly simplifies the analysis of how AI systems can be used in the inventive process. In removing the Pannu factors from the analysis of whether an AI system is an inventor, the November 2025 Guidance allows inventors to extensively use AI systems in developing an invention without needing to consider the extent to which an inventor used an AI system – such as tracking the prompts used by an inventor to prompt an AI system to generate an invention, characterizing the nature of the prompts as describing a general problem, directing an AI system towards a particular solution, or the like.
This change may also reduce the likelihood of AI creators being deemed co-inventors, because they are only considered as tool-builders. For example, in an AI-assisted drug discovery collaboration between AI experts and drug discovery scientists, under the new Guidance, the drug discovery scientists may use the services, ideas, and aid of the AI system without any concern that the AI system or its creators could become co-inventors. However, whether the AI experts are inventors should be assessed.
In short, the November 2025 Guidance reiterates that AI systems themselves cannot be named as an inventor on a patent application or issued patent. This is in line with the Federal Circuit’s decision in Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022), in which the Federal Circuit held that only natural persons could be listed as inventors on a patent application or issued patent. Thus, past policy involving the rejection of claims under 35 U.S.C. § 101 and 115 for claims in any application in which an AI system is listed as an inventor or joint inventor remains in place. Relatedly, because only natural persons can be listed as inventors on a patent application or an issued patent, priority claims to foreign applications that name an AI tool as a sole inventor will not be accepted, and the ADS for US patent applications should only name natural persons even when claiming priority to a foreign application including natural persons and AI tools as joint inventors.
We would observe that this is an administrative change, subject to recission by subsequent notice and comment. Because this may not be a permanent change, it may still be worth preserving evidence of how inventors use AI systems in the inventive process to defend against future challenges to patent validity.
Dueling Umbrellas- What to Do When Policy Interpretation Gets Metaphysical
Case Citation: Johnson v. Reliance Standard Life Insurance Company, No. 23-13443, 2025 WL 3251015 (11th Cir. Nov. 21, 2025)
The Situation: By a 2-1 vote, the Eleventh Circuit has held that a policy interpretation (1) endorsed by the dissenting opinion, (2) suggested by a prior Eleventh Circuit panel, and (3) adopted by other courts around the country was not just wrong, but so unreasonable that it failed arbitrary-and-capricious review. The case is a cautionary tale in several respects.
The dispute arose under a long-term-disability (LTD) policy that excluded coverage for pre-existing conditions, defined as “any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines.” For two years pre-policy, the plaintiff had symptoms of a rare auto-immune disease, scleroderma. She received treatment, took medicines, and underwent diagnostic procedures. But none of her doctors could figure out what it was, diagnosing her with nearly a dozen other ailments instead. After the policy kicked in, her doctors landed on the correct diagnosis. The question for the Court was whether something counts as a preexisting condition if the insured was treated for it pre-policy but her doctors didn’t name it correctly.
The Result: The majority answered no, holding that the insurer thus wrongly denied coverage. This outcome was unlikely for two main reasons. First, this was an ERISA LTD policy that granted the insurer “discretionary authority” to interpret it. The insurer could lose only if its interpretation was not just wrong, but so unreasonable as to be “arbitrary and capricious.” Second, multiple judges already had interpreted similar policy language in line with the insurer’s interpretation.
Starting with the deferential standard of review, it may have been diluted in part due to a quirk of the Eleventh Circuit. In contrast to other circuits that apply regular abuse-of-discretion review to an insurer’s discretionary interpretation of its own ERISA policy, the Eleventh Circuit uses a bespoke six-step sequence that starts by asking whether the insurer’s interpretation is wrong under de novo review, then only later asks if it is so wrong as to be arbitrary and capricious. This sequence triggers what influence scholar and renowned psychologist Robert Cialdini calls commitment-and-consistency bias: someone is more likely to agree with a stance if they first agree with it a little. Here, once a judge convinces themself that an interpretation is wrong, there is a stronger cognitive temptation to believe it is also very wrong. By contrast, leading with the abuse-of-discretion question creates a more level playing field.
Second, at the policy interpretation stage, things got metaphysical. The majority viewed the pre-policy doctors’ activities as treating symptoms rather than a medical condition. Because they repeatedly misdiagnosed the plaintiff with other ailments instead of scleroderma, the majority reasoned, they could not have been treating her “for” scleroderma. The “symptoms are not the disease” and “an indication of something is not the thing itself,” just as “a wet umbrella is [not] ‘the same thing’ as a hurricane.”
The dissent saw it differently. The plaintiff had been treated, prescribed medication, and undergone diagnostics “for the ‘various symptoms and conditions of scleroderma.’” There was “more than mere ‘consistency’ between what [she] was treated for and scleroderma; they are the same thing.” Borrowing an umbrella of its own, the dissent reasoned that if one “us[es] an umbrella to stay dry without knowing whether the current rainstorm is a hurricane or quick summer shower,” either way, “the umbrella fends off the rains.”
Since both majority and dissent found different dictionaries and prior cases siding with their respective interpretations, one would expect the insurer to prevail under arbitrary-and-capricious review. Instead, the majority seized on a stray answer at oral argument, construing it as an admission that the insurer would deny coverage if any pre-policy symptom was not inconsistent with the later diagnosis. The majority held that that position, albeit taken from another party in a different case, “is unreasonable—full stop.” So, it reversed the judgment of the district court.
Looking Ahead: This appeal seems ripe for rehearing en banc (although quite rare, especially in insurance coverage cases). As to standard of review, even the majority acknowledged that the Eleventh Circuit’s six-step sequence “is likely unnecessarily complex (and may even obscure the lawful result in certain cases)”—the result here is a prime example. If not now, then when the right case comes along, insurers may consider investing in overturning this framework and the subtle cognitive bias it creates.
As to the merits policy interpretation, how lower courts apply the majority’s test is key. That test seems to be that the right disease need not be formally diagnosed pre-policy so long as it at least is “suspected.” The majority suggests that “strong indications” of the particular illness, “reasonable cause” to diagnose the particular illness, or “a distinct symptom or condition from which one learned in medicine can diagnose the disease” all qualify but were not satisfied on these facts. Whether that blurry line will yield consistent results in practice remains to be seen.
KEY TAKEAWAYS FOR INSURERS
Look out for interpretive frameworks that create commitment-and-consistency bias. Experiments have shown that judges are susceptible to this type of cognitive effect. Although hard to prove in any given case, the long-term effect can be significant. Investing in reshaping the law into a more level playing field affects not just the individual cases but also their broader ripples into adjacent caselaw.
Issue framing and careful answers at oral argument matter. Insurers often are held to a higher standard, even when the law requires more lenient treatment. The impact of this can be mitigated by having a firm theory of the case and knowing exactly when one can, cannot, or must cede ground.
Federal Court Reinforces Safe-Harbor Protection for Insurers in Mass. Chapter 93A Litigation
In Gretzky v. AmGuard Insurance Co., the United States District Court for the District of Massachusetts evaluated how insurers facing a 176D demand letter post-judgment may limit exposure under the safe-harbor provisions of Chapter 93A, § 9(3). The court reaffirmed that a timely, well-supported written tender may successfully invoke the safe harbor provisions and prevent exposure to punitive damages in post-judgment allegations of bad faith.
In Gretzy, after settling the underlying lawsuit for the full policy limit (and payment of the policy limit), the plaintiff sent a demand letter to the insurer alleging unfair claim-handling practices and alleging entitlement to additional damages, including prejudgment interest. The defendant insurer responded with a written tender of $232,769 representing the full 12% statutory prejudgment interest accrued on the one-million-dollar policy limit from the date the underlying tort claim was filed. The plaintiff rejected the offer and filed suit.
Massachusetts General Laws Chapter 93A, § 9(3) provides a “safe harbor” provision to recipients who timely tender a written settlement tender that was reasonable in relation to the injury the petitioner actually suffered. Thus, defendant sought to limit damages under this safe harbor provision, asserting that its written tender was reasonable. The court rejected plaintiff’s position that the written tender should have included a multiplier of the underlying judgment pursuant to the punitive damages statutory scheme and include damages for emotional distress and litigation stress.
Instead, the court reaffirmed that in Chapter 176D/93A cases arising from the alleged failure to effectuate a prompt and equitable settlement, the appropriate benchmark for a written tender is the “loss of use damages.” This “loss of use” damages based on the loss of use of the wrongfully withheld settlement funds is the proper standard. In this case, the written tender fully compensated the plaintiff for the loss of use based on the full policy limit. The offer, therefore, was reasonable as a matter of law. As to the plaintiff’s contentions that the settlement should have included damages for emotional distress, such request was not included in the demand letter. Therefore, the defendant could not have been expected to include compensation for such damages in its written tender.
Insurers who act promptly and make a timely reasonable written tender to a plaintiff might avoid punitive damages exposure under Chapter 93A.
Abby Druhot contributed to this article
Weekly Bankruptcy Alert December 1, 2025 (For the Week Ending November 30, 2025)
Covering reported business bankruptcy filings in Massachusetts, Maine, New Hampshire, and Rhode Island, and Chapter 11 bankruptcy filings in New York and Delaware listing assets of more than $1 million.
Chapter 11
Debtor Name
BusinessType1
BankruptcyCourt
Assets
Liabilities
FilingDate
McHugh Junk Removal Inc.(Lancaster, MA)
Not Disclosed
Worcester(MA)
$100,001to$500,000
$500,001to$1 Million
11/24/25
Chapter 7
Debtor Name
BusinessType1
BankruptcyCourt
Assets
Liabilities
FilingDate
384 Washington LLC(Dedham, MA)
Not Disclosed
Boston(MA)
$0to$50,000
$100,001to$500,000
11/24/25
MIL 21 E, LLC(Cambridge, MA)
Lessors of Real Estate
Boston(MA)
$500,001to$1 Million
$1,000,001to$10 Million
11/26/25
1Business Type information is taken from Bankruptcy Court filings, which may include incorrect categorization by the debtor or others.
Puerto Rico’s Climate Suit Dismissal Exposes Stark Policy Limits to Extreme Climate Action
Recently, U.S. District Judge Silvia Carreño-Coll dismissed an amalgamation of climate lawsuits filed by 37 Puerto Rican municipalities against American energy producers. Led by the municipality of Bayamón, lawyers sought to hold American oil and gas companies liable for infrastructure damages caused by 2017’s Hurricane Maria. The premise of the lawsuits was that oil and gas producers coordinated to hide the environmental effects of fossil fuels in the research on climate change.
The court concluded the municipalities had waited too long, blowing past the four-year statute of limitations for racketeering claims. While the municipalities plan to appeal, this time limit importantly sheds light on climate lawsuit losses in the past few years: it exposes the stark legal limits of climate litigation and the way some climate activists are twisting and abusing our judicial system for their own policy gain.
The Puerto Rico lawsuit, first filed in 2022, broke new ground by including Racketeer Influenced and Corrupt Organizations Act (RICO) and antitrust charges, novel claims in climate litigation that hinge on criminal coordination to deceive the public about widely-known facts around emissions and climate change.
For actual RICO charges, prosecutors must prove that the defendant has engaged in a “pattern of racketeering activity” within a criminal enterprise. Further, for civil RICO cases like this one, existing law upheld by the Supreme Court states that plaintiffs must bring forward a suit within four years from when the injury occurred or was discovered.
The municipalities argued that the statute of limitations here should be tolled because companies concealed critical information from the public. Judge Carreño-Coll found that reasoning flimsy, in part because the public scientific information around man-made climate change goes back to the 1970s and has been widely discussed and debated by U.S. officials for years. In 1970, Puerto Rico specifically passed the “Environmental Public Policy Act of the Commonwealth of Puerto Rico,” which was amended in 1973, 1999, and 2004, respectively. As she noted, the doctrine of “fraudulent concealment” requires concrete evidence that information was hidden and the plaintiffs simply failed in its burden of proving that risks were hidden. Here, abundant public reporting already existed and municipalities had a duty to investigate, not stall.
The ruling underscores a larger truth: Statutes of limitations aren’t just technicalities, but are core to ensuring fairness in our legal system. Without them, defendants of all sorts could face perpetual liability for actions debated, litigated, and regulated decades earlier.
Climate activists now face their eleventh straight dismissal in emissions tort litigation. Courts across the country have consistently rejected the theory that energy producers can be treated like a criminal cartel. In January, a judge in New York dismissed New York City’s climate lawsuit, writing that the City contradicts itself when claiming deception, yet arguing that “there is near universal consensus that global warming is primarily caused, or at least accelerated, by the burning of fossil fuels.” A similar dismissal in August in Charleston, South Carolina involved another statute of limitations issue, as the city’s 2020 lawsuit also blew past a three-year statute of limitations under South Carolina’s Unfair Trade Practices Act.
For these lawsuits and others – like Honolulu’s ongoing 2020 suit that has long passed a two-year deadline to act – the statute of limitations is critical for determining cases of harm. However, a mountain of evidence going back decades, from the 1978 National Climate Program Act and even back to a 1965 speech from President Johnson, recognizes the possibility of climate risks from an increase in carbon dioxide.
U.S. federal law does not outlaw oil and gas activities, as fossil fuels still account for 84% of total U.S. primary energy production in 2023. Even plaintiff states in these lawsuits use fossil fuels: 46% of New York state’s energy is through natural gas and 78.8% of Hawaii’s electricity in 2023 was generated using fossil fuels. Because of the nature of oil and gas, with its risks and universal importance to our economy, security, and affordability, it is clear that none of these criminal deception claims hold water.
Judge Carreño-Coll’s opinion dismantled the idea that Puerto Rico was uniquely “targeted” by energy companies, exposing how RICO and antitrust allegations have been weaponized against American energy producers. She also reminded the plaintiffs that courts cannot assume the role of legislatures by designing carbon policies and issuing sweeping payouts from the bench.
Ultimately, Judge Carreño-Coll’s ruling is a reality check for extreme climate activists looking to force state courts into the roles reserved for Congress and the EPA. The dismissal highlights the dangers of treating the legal system as a blunt instrument of climate activism. By cutting through legally unsound claims, Judge Carreño-Coll protected the integrity of the courts, the long-standing legal principles of limitation statutes and reminded us that real solutions must come from policymakers, not flimsy litigation.
Disclaimer: The views and opinions expressed in this article are those of the author and not necessarily those of The National Law Review (NLR). Please see NLR’s terms of use.
Second Circuit Undercuts Plaintiffs’ Threats of Mass Arbitration Fees, Often Used In Asserting Privacy Claims
Earlier this fall, the United States Court of Appeals for the Second Circuit undermined a strategy often used by the plaintiff’s bar in privacy claims: the threat of mass arbitration fees. In a decision reversing the district court, the Second Circuit held that the petitioners cannot use the Federal Arbitration Act (FAA) to compel arbitration on the basis that a business failed to pay arbitration fees. This decision adds to a growing body of precedent that courts cannot compel a business to pay arbitration fees, which as discussed previously here on Privacy World, can total in the thousands or millions of dollars in the event of mass arbitration.
Case Background
The case arose out of large-scale layoffs that took place at Twitter (now X Corp.) after its acquisition by Elon Musk in 2022. Thousands of terminated employees who had signed arbitration agreements as part of their contracts brought arbitration actions against Twitter.
The employee argued that, under the applicable JAMS guidelines, a respondent business like Twitter must pay all arbitration fees other than the initial filing fees. Twitter argued that the arbitration fees should be split pro rata under the terms of the employment contracts. JAMS sided with the employees and refused to appoint an arbitrator until the fees were paid. The employees then filed a petition in the Southern District of New York under section 4 of the FAA seeking “an order compelling Twitter to pay all ongoing fees for their arbitrations.” The district court sided with the employees and ordered Twitter to pay all of the disputed fees. Twitter appealed.
Second Circuit Reverses Lower Court’s Ruling on Fees, Finding That a Contrary Holding Would Undermine Purpose, Goals of Arbitration
The Second Circuit reversed the district court’s ruling. The Court started by recognizing that the FAA only allows a court to compel arbitration where there has been a “failure, neglect, or refusal” to arbitrate. 9 U.S.C. § 4. The Court then cited a body of caselaw holding that procedural issues beyond arbitrability—including waiver, delay, and forum-specific defenses—”are presumptively not for the judge, but for an arbitrator, to decide.” Putting these threads together, the Court reasoned that the payment of fees is merely a procedural issue that must be decided and enforced by an arbitration panel and not a “failure, neglect, or refusal” to arbitrate. In reaching this result, the court cited the Third, Fifth, Ninth, and Eleventh Circuits which have reached similar conclusions.
Supporting its reasoning, the Second Circuit stated that the employees’ position would undermine “the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation.” Without the FAA, the employees’ remedies for non-payment is “to [ask] JAMS to use the tools available to it to resolve the procedural [issue] as it sees fit – even if that ultimately means terminating the arbitrations.”
This case gives businesses in the Second Circuit an extra line of defense when facing large fees from mass arbitration—and offers persuasive authority for defendants litigating in other forums.
Even so, companies should stay vigilant and carefully review the language in existing arbitration agreements to make sure their potential exposure to mass arbitrations in the first place are minimized. This is particularly so given the recent abuse of mass arbitration as a procedural mechanism by the plaintiff’s bar to bring frivolous or unsupported claims, particularly in the area of consumer privacy.
Pixel-Tracking gets its third stripe: Adidas learns CIPA isn’t Optional.
The privacy world has been so busy with pixel-tracking that retail cases almost started to feel like the “quieter cousin.” Camplisson v. adidas, decided this week, is a reminder that retail sites aren’t getting a free pass, especially when they install high-powered pixels that behave more like surveillance tools than simple analytics.
The plaintiffs weren’t doing anything intimate or personal — they were just shopping on adidas.com. But the TikTok Pixel and Microsoft Bing tracker embedded in the site didn’t just record clicks. According to the complaint, they collected IP addresses, device identifiers, timestamps, fingerprinting data, and even used features like AutoAdvanced Matching that can tie your browsing back to your name, birthday, and address. That’s not “retargeting ads.” That’s a map back to the actual person, with the live location feature, if I may add.
And Judge Curiel’s order reflects exactly that reality. Instead of getting caught up in the “but this is just retail!” framing, the Court focuses on the substance: the trackers were allegedly installed on users’ browsers, they collected identifying and addressing information, and they did it without consent. Under CIPA’s pen-register provisions, that is more than enough to state a claim.
What’s interesting is how thoroughly the Court rejects the defense playbook. The “no standing because this isn’t a traditional privacy harm” argument? No. The “CIPA only applies to 1970s phone lines and this will break the internet” argument? Also no. Courts have been very clear that CIPA isn’t tied to a specific technology; it’s tied to the principle of preventing secret interception. TikTok Pixel + fingerprinting + third-party data sharing falls squarely within that principle.
Then there’s the consent angle. adidas, like half the internet, relied on buried browsewrap terms in the website footer — the kind no human ever scrolls down to find. Judge Curiel essentially says: if you want users to consent to browser-level tracking, you need to actually ask them. Not hide it in tiny font. Not imply that visiting the site equals consent. Without conspicuous notice and an affirmative “yes,” the consent exception under CIPA doesn’t apply.
And the ending is where the sass (quietly but unmistakably) lands. The Court basically shuts the door on adidas’s dismissal arguments with the judicial equivalent of: “Plaintiffs have sufficiently alleged a privacy invasion — the motion is denied.” Not dramatic. Not emotional. Just a firm reminder that CIPA’s pen-register provisions have teeth, and retail defendants don’t get to track first and explain later.
So when retail pixel cases meet reality, the message is simple: if your site quietly plants sophisticated trackers on users’ browsers and sends their information to third parties, courts aren’t going to swoop in and save you at the pleadings stage. CIPA protects the right not to be secretly tracked without consent. And in adidas, that was more than enough for the claim to move forward.
HBO Max Users’ Privacy Claims Divided Between Arbitration Providers
A November 4, 2025, ruling in Brooks v. WarnerMedia Direct, LLC, offers a clear reminder for organizations that changes to terms of service, especially those impacting where consumer disputes are heard, can have direct operational consequences. For WarnerMedia, the parent company of HBO Max, the result is a split process in which consumer privacy claims might proceed in two different arbitral forums, based on whether individual users can be shown to have agreed to updated terms of use regarding arbitration.
Factual Summary
The plaintiffs are former subscribers of HBO Max, a subscription-based streaming platform. The plaintiffs brought claims under the federal Video Privacy Protection Act, alleging that HBO Max improperly shared video-watching histories with third parties.
From its launch through late 2022, HBO Max’s terms of use required mandatory arbitration of nearly all disputes before the American Arbitration Association (AAA). Each plaintiff assented to those terms when subscribing to the streaming service. On December 20, 2022, WarnerMedia updated its terms to designate National Arbitration and Mediation (NAM) as the arbitral forum for all subscriber disputes, superseding AAA. Notices regarding this change were delivered to subscribers by email and via in-app pop-ups. WarnerMedia specified that continued use or access after notice would be deemed assent to the new terms.
In May 2023, HBO Max rebranded as “Max” and its updated terms continued to require NAM arbitration. Customers had to agree to these terms by clicking “Start Streaming” before accessing the Max platform. In January 2023, plaintiffs’ counsel sent letters attempting to reject the December 2022 terms and served Notices of Dispute consistent with the prior AAA agreement. WarnerMedia responded that it had delisted its AAA clause and would not register the clause again.
Plaintiffs and WarnerMedia both agreed that arbitration was the appropriate dispute resolution forum. However, the plaintiffs asserted that arbitration should be governed by the AAA and WarnerMedia held that it should be governed by NAM. The question turned on whether each subscriber had assented to be bound by the updated NAM agreement or remained covered by the prior AAA agreement.
The Court’s Analysis
WarnerMedia demonstrated that three users agreed to the updated terms by their conduct after notice. This included streaming HBO Max content, maintaining monthly subscriptions via third parties like T-Mobile and Hulu, and clicking an in-app assent button before starting streaming. For these plaintiffs, the court compelled arbitration in NAM, the forum specified in the revised contract. For the two other plaintiffs, the record showed that neither individual took any action after receiving notice that would constitute acceptance of the NAM agreement. Specifically, their subscriptions had expired before the updated terms came into effect, and discovery produced no evidence that either subscriber used HBO Max after the changes or streamed content as an authorized user on another account. Merely accessing the platform to review the new terms or sending a letter purporting to reject the new agreement was not enough to demonstrate assent under the court’s analysis. Without any post-notice activity(such as logging in, streaming, maintaining an active subscription, or clicking to agree to the new terms) there was no unambiguous manifestation of consent. Therefore, the court held that these users remained subject only to their original AAA agreement. The court stayed the underlying case pending arbitration.
Takeaways
For organizations, this opinion imparts several lessons:
Contract amendments about dispute resolution must include clear notice and mechanisms to record user assent. If consumer claims arise, a company needs to show who received updated terms and how users agreed, either by their actions or explicit acknowledgment.
Where notice and assent cannot be clearly shown, organizations risk managing disputes across multiple forums under different versions of their own agreements. This can mean higher costs, operational inefficiencies, and increased litigation risks.
Detailed business records showing user activity and consent events may be critical data points in establishing who is bound to new terms. Gaps or inconsistencies may leave some claims governed by older contracts.
Companies should review their processes for contract updates and the evidence they keep for user notice and assent. Patchwork dispute resolution is a burden and failing to manage assent with care could mean organizations face disputes in reruns across multiple arbitral stages.
DOJ Subpoena for Patient Records from Children’s Hospital of Philadelphia Blocked by Federal Court
On November 21, 2025, in a lengthy decision, U.S. District Judge for the Eastern District of Pennsylvania Mark A. Kearney quashed a subpoena issued by the U.S. Department of Justice (DOJ) to Children’s Hospital of Pennsylvania’s Gender and Sexuality Development Program (CHOP) seeking documents:
(1) identifying the names, addresses, and social security numbers of its child patients prescribed puberty blockers and hormone therapy and their families’ identifying information; (2) the child’s medical treatment records including diagnoses; and, (3) describing each child’s informed consent, patient intake, parent or guardian authorization, and use of medicine not approved by the Food and Drug Administration.
CHOP objected to producing “child-patients’ confidential medical records” and moved to quash the subpoena’s request for these three categories of records
The court found that the DOJ:
Offers no basis to compel the Hospital to identify the children (and their families), their treatment records, and disclosures made to them. We further find, even if the information responsive to these three requests is relevant (and thus authorized by Congress for a subpoena), the children’s and their families’ privacy interests in their highly sensitive and confidential medical and psychological treatment in an charged political environment which considers their medical treatment to a radicalized warped ideology far outweigh the Department of Justice’s shifting need for the information specifically identified in the three challenged requests. We grant the Hospital’s motion in part striking the three challenged requests and all information contained in responses to other requests disclosing the same information.
This decision comes on the heels of the actions of other federal judges quashing identical DOJ subpoenas identical to the one issued to Boston Children’s Hospital, and telehealth provider QueerDoc in September and October 2025 respectively. The DOJ has appealed from the Boston Children’s Hospital order but has not yet appealed the QueerDoc order.