Navigating Whistleblower Protections and Compliance with DEI Executive Orders
As Polsinelli has discussed, President Donald Trump issued Executive Order No. 14151 titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” and Executive Order No. 14173 titled “Ending Radical and Wasteful Government DEI Programs and Preferencing” (collectively, the “Orders”) shortly after taking office, and that a District Court of Maryland enjoined certain aspects of those Orders. The Trump administration appealed the District Court’s decision, and on March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit granted the Trump administration’s request for a stay (i.e., pause) of the injunction pending the outcome of the appeal. This means that during the appeal, the Orders are in full force and effect.
There are many articles discussing the importance of employers taking steps to determine whether their actions, policies and procedures may violate the Orders.
Given the back-and-forth nature of the decisions related to the Orders, a question that some employers may have is whether an employee is protected from retaliation if they report that they believe their employer is violating one of the Orders, but that Order is eventually struck down. Employers may be surprised to learn that if an employee reasonably believes the employer’s activity violates a legal provision (here, for example, the Orders), then they may be protected even if the Orders are later revoked or struck down.
Whistleblower Protections and Potential Activity Related to the DEI Executive Orders
What might protected activity look like with regard to these Orders? Examples of potential whistleblowing activity could include:
An employee may report the employer is continuing DEI programs, trainings or initiatives that they believe violate the Orders prohibiting race- or gender-based preferences.
An employee may report that an employer or an employee of the employer is prioritizing hiring, promotions or contracting decisions based on race, gender or other DEI-related criteria.
An employee may report that their employer is requiring them to participate in DEI training and claim such training promotes race- or gender-based biases, in violation of the Orders.
Employees working for federal contractors may report that their employer is not following the Orders’ requirements regarding DEI restrictions in government-funded projects or is inaccurately certifying compliance with DEI-related contract terms.
How Should Employers Respond to Whistleblowing?
When an employee reports a concern or engages in whistleblowing activities, employers should carefully evaluate and respond to the allegations. Steps an employer should consider taking include:
Assessing the complexity and seriousness of the employee’s complaint and, if appropriate, consider an investigation conducted under the attorney-client privilege or by an external investigator in conjunction with human resources.
Documenting findings and actions taken.
Maintaining a communication channel with the employee throughout the process.
Communicating with the employee that the investigation has concluded, sharing appropriate information considering the privacy of other employees and privilege considerations.
A well-handled response not only helps address and potentially resolve immediate concerns but also demonstrates the company’s commitment to compliance and transparency, reducing potential legal exposure.
Given the current fast-changing circumstances, now may be a good time for employers to review their complaint reporting procedures. An effective internal reporting system typically will be accessible, confidential and supported by a clear policy that outlines the process for handling reports and the protections available to employees.
How Should Employers Treat Whistleblowers?
Employers should not try to identify who made a report of an alleged violation of law to a governmental agency, particularly if the agency is then investigating the employer. That information is usually not necessary to respond to the report and could create additional risk for the employer.
If an employer knows who has made a complaint, then the employer should treat that employee with the same level of care it would afford its other employees. In particular, the complaining employee should not be held to a higher performance or behavior standard.
That said, making a complaint does not mean that an employee cannot be held to performance and behavior standards. Nor does making a complaint mean that an employee cannot be separated from employment for lawful reasons. However, as in many areas, employers would be wise to consult counsel before taking adverse action against an employee if the employee has recently complained that the employer has violated the law. This is so because many courts have held that close timing is enough to infer a retaliatory motive. Thus, employers should be very careful to show that it has a legitimate, non-retaliatory reason for separating an employee who it knows has complained (rightly or wrongly) of a violation of law, particularly if that complaint occurred close in time to when the separation will occur.
Next Steps for Employers
Employers should also consider regularly reviewing their policies and procedures to ensure ongoing compliance with applicable law. Reviewing policies and procedures with legal counsel can help identify areas of risk and ways to implement changes. By taking a proactive approach to compliance and employee relations, employers can create a positive work environment that supports both legal obligations and business objectives.
Finally, employers particularly impacted by the recent changes may want to consider offering training to managers by knowledgeable trainers who can explain these new laws and how they may change the way an employer operates.
Still in the Dark After Loper Bright: SCOTUS Declines to Shine a Light on NLRB Deference Post-Chevron
Last year, the United States Supreme Court’s Loper Bright decision put an end to “Chevron deference,” a judicial practice of deferring to federal agency interpretations of ambiguous statutory language. While the legal blogosphere has spent considerable ink weighing the impact of Loper Bright, the Supreme Court recently rejected a pair of petitions on the amount of deference owed to the National Labor Relations Board (NLRB), casting an even longer shadow over Loper Bright. So, what can we learn from the Supreme Court’s inaction?
Differing Sources of Deference
Issued in 1984, Chevron created a “bedrock principle of administrative law that a reviewing court must defer to a federal agency’s reasonable interpretation of an ambiguous statute it administers.” According to Kent Barnett and Christopher J. Walker in Chevron in the Circuit Courts, Chevron was “one of the most cited Supreme Court decisions of all time.” Under Chevron, a court would first determine whether a statute clearly answered a particular question. If it did, the court would simply apply the statute’s answer. If the statute was “silent or ambiguous,” however, the court would defer to the interpretation of the federal agency charged with enforcing the statute if the agency’s interpretation was “based on a permissible construction of the statute.”
Loper Bright put an end to Chevron’s reign, however, holding that deference to an administrative agency violated the Administrative Procedures Act (APA) because courts and judges were supposed to interpret statutes unless a statute specifically reflected Congressional delegations of discretionary power to the federal agency. In other words, if Congress specifically delegated authority to agencies to promulgate regulations and relevant definitions, Loper Bright appeared to leave that deference intact. After all, in those situations, Congress, not Chevron, required courts to defer to agencies. If Congress did not make that delegation, however, a court, not the agency, was responsible for interpreting an ambiguous statute.
The NLRB is supposedly one of those agencies Congress tapped to promulgate regulations and relevant definitions for the NLRA. Indeed, the Supreme Court noted in Ford Motor Co. v. NLRB, years before Chevron, that Congress had made a “conscious decision” to delegate to the NLRB “the primary responsibility of marking out the scope of the statutory language.” Similar delegations to federal agencies exist in the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), and the recently passed Pregnant Workers Fairness Act and the PUMP Act.
So, Loper Bright should have little impact on the NLRB’s interpretation of the NLRA and other labor statutes, right? Not so fast. Reasonable minds, like the Sixth and Ninth circuits, might disagree.
Circuital Thinking
The Ninth Circuit’s Approach
The dispute started in the Ninth Circuit between a group of hospitals and their employees’ union. Per the collective bargaining agreement, the hospitals deducted union fees from participating employees if the employees executed a written assignment authorizing the deduction. After the collective bargaining agreement expired, the hospitals continued to deduct dues for several months but then stopped. They notified the union that they believed the written assignments violated the Taft-Hartley Act because the union’s assignments did not have specific language regarding revocability upon the expiration of the collective bargaining agreement.
The union filed an unfair labor practice charge, the NLRB filed a complaint, and an administrative law judge determined that the hospitals committed an unfair labor practice by unilaterally ending the practice of collecting union dues. After a series of decisions, the NLRB determined that the Taft-Hartley Act did not require specific language and found that the hospitals engaged in unfair labor practices. On appeal, the Ninth Circuit agreed with the NLRB’s decision.
After the Supreme Court issued Loper Bright, the hospitals petitioned the Supreme Court for a writ of certiorari, arguing that the Ninth Circuit improperly deferred to the NLRB’s interpretation of the NLRA instead of performing its own statutory analysis.
The Sixth Circuit’s Approach
The Sixth Circuit took a slightly different approach. There, a union and a road paving company began negotiating a collective bargaining agreement. When negotiations broke down, the union began picketing. As negotiations continued, the union requested information from the company regarding bargaining unit employees. However, the company did not provide that information, and the union filed unfair labor practices charge against the company based on picketing violations and the failure to provide that information. The NLRB brought a complaint, and an administrative law judge issued a decision finding that the company violated the NLRA by refusing to provide the employee bargaining unit information. The NRLB affirmed the administrative law judge’s decision.
On appeal, the Sixth Circuit, citing Loper Bright, declined to defer to the NLRB’s interpretation of the NLRA and decided to exercise independent judgment in deciding whether an agency acted within its statutory authority. Performing its own analysis, the Sixth Circuit affirmed the NLRB’s decision.
The company petitioned the Supreme Court for a writ of certiorari, arguing, in part, that the Sixth Circuit was required to defer to the NLRB’s interpretation of the NLRA pursuant to Loper Bright. The company also was seeking to challenge the president’s removal authority, and may have made its Loper Bright argument to sweeten the deal for Supreme Court review (since both the NLRB and Sixth Circuit reached the same result on statutory interpretation).
Supreme Inaction
Given these two apparently conflicting interpretations of Loper Bright, it seemed the Supreme Court was primed to clarify the appropriate approach. Was the Ninth Circuit correct in deferring to the NLRB’s analysis of the NLRA or was the Sixth Circuit correct in adhering to Loper Bright’s direction that it decide the meaning of ambiguous statute? At any rate, certainly a circuit split requires Supreme Court review?
Apparently not. The Supreme Court denied certiorari in both cases without any clarifying statement, leaving it unclear whether Loper Bright will impact NLRB or other agency decisions in the future. So, what does this mean? On one hand, in both cases the federal circuit courts ultimately affirmed the NLRB’s decisions, albeit after performing different analyses. Maybe the Supreme Court was unwilling to wade into these waters if both courts ultimately reached the correct decision. On the other hand, were these simply cases where the statutory text was unambiguous, such that agency interpretations were not even truly implicated?
Unfortunately, we’re left to wait until the next dispute. Perhaps time will tell, even if the Supreme Court won’t. In the interim, Bradley is available to answer any questions you might have regarding new administrative rules or decisions.
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When “It’s Obvious” Just Isn’t Enough: Challenger’s Burden to Prove Obviousness
The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s decision that a patent was not obvious because the petitioner failed to show sufficient support of obviousness based on prior art. AMP Plus, Inc. v. DMF, Inc., Case No. 23-1997 (Fed. Cir. Mar. 19, 2025) (Lourie, Bryson, Reyna, JJ.)
DMF owns a patent directed to a compact recessed lighting system designed for installation in a standard electrical junction box. In 2019, AMP, doing business as ELCO, petitioned for inter partes review of several claims of the patent on three grounds of unpatentability:
Anticipation by a prior reference
Obviousness based on a combination of two references
Further obviousness based on an additional source.
The Board found that one claim was anticipated but ruled that ELCO failed to prove unpatentability of the other claims, including the claim at issue on appeal. The claim at issue describes a system with wires connected to a driver and a first connector, coupled to a second connector that in turn is connected to the building’s electrical system. This specific connection was referred to as “Limitation M.” ELCO appealed. In that earlier appeal (2022), the Federal Circuit affirmed the Board’s ruling on all claims except the claim at issue and remanded the case back to the Board for further analysis.
On remand, the Board concluded that ELCO failed to demonstrate the unpatentability of the claim at issue because ELCO’s petition lacked a substantive analysis of Limitation M. The Board found ELCO’s argument that a prior art marine lighting system could be adapted for the claimed building use unsupported by evidence and ruled that the claim at issue was not obvious. Again, ELCO appealed.
ELCO raised two main arguments. First, it argued that the Board erred in not determining that the claim at issue was anticipated by a prior reference, as the Board had previously found another claim to be anticipated by the same reference. The Federal Circuit rejected this argument because ELCO had only challenged the claim at issue on the basis of obviousness in its original petition, not anticipation. Since the issue of anticipation was not raised in the petition, the Court determined that ELCO could not introduce this new ground of unpatentability on appeal.
Second, ELCO argued that its petition had sufficiently demonstrated the obviousness of Limitation M based on the prior references. The Federal Circuit disagreed, finding that ELCO’s petition did not adequately address the specific requirement for coupling the system to a building’s electrical infrastructure. The petition failed to discuss how the recessed lighting system would be installed in a building, and the references cited did not provide adequate support for the argument of obviousness for this particular limitation.
The Federal Circuit emphasized that it was not the Board’s responsibility to supplement the petitioner’s arguments or search for evidence to support an inadequately supported claim challenge. The Court reiterated that an obviousness analysis does not require the Board to fill gaps in the petitioner’s original filing. In this case, the Board had appropriately determined that ELCO failed to meet its burden of demonstrating the obviousness of Limitation M.
No APA Review of Commission Refusal to Issue Sua Sponte Show Cause Order
The US Court of Appeals for the Federal Circuit dismissed an appeal challenging a US International Trade Commission decision that upheld an administrative law judge’s (ALJ) order, ruling that such an order was within the Commission’s discretion and unreviewable. Realtek Semiconductor Corp. v. International Trade Commission, Case No. 23-1095 (Fed. Cir. Mar. 18, 2025) (Moore, C.J.; Reyna, Taranto, JJ.)
DivX filed a complaint at the Commission against Realtek alleging a violation of § 1337 of the Tarriff Act. DivX later withdrew the complaint. Realtek subsequently filed a motion for sanctions against DivX, alleging certain misconduct. The ALJ denied the motion on procedural grounds. Realtek subsequently petitioned for Commission review, asking the Commission to exercise its authority to issue a sua sponte order requiring DivX to show cause explaining why it had not engaged in sanctionable conduct. The Commission decided not to review and adopted the ALJ’s order without comment.
Realtek appealed, contending that the Commission violated the Administrative Procedure Act (APA) by not issuing a sua sponte show cause order. The Commission argued that Realtek’s appeal should be dismissed, contending that the issue raised was unreviewable.
The Federal Circuit agreed with the Commission, stating that under § 701(a)(2) of the APA, decisions made by an agency are unreviewable by the Court when they are entrusted to the agency’s discretion by law. The Court explained that the sua sponte issuance of a show cause order is a decision that “may be, not must be,” entered by the ALJ or on the Commission’s initiative. Therefore, the decision not to act sua sponte is a decision that remains wholly within the agency’s discretion.
The Federal Circuit rejected Realtek’s argument that the Commission’s refusal to act was reviewable because the Commission failed to provide reasoning, and that Commission review would have allowed the Court to determine if there were “illegal shenanigans” in exercising discretion. However, the case cited by Realtek involved the review of “shenanigans” that fell within the Court’s reviewable categories, not one related to the Commission’s refusal to issue a show cause order sua sponte. The Court found no support for Realtek’s claim that discretionary agency actions under § 701(a)(2) become reviewable under the APA simply because the agency fails to provide its reasoning.
Even Jepson Preambles Require Written Description Support
The US Court of Appeals for the Federal Circuit found a Jepson claim unpatentable where the specification did not provide adequate written description for the portion of the claim purporting to recite what was already well known in the prior art. In re Xencor, Inc., Case No. 24-1870 (Fed. Cir. Mar. 13, 2025) (Hughes, Stark, Schroeder, JJ.)
Xencor filed a patent application claiming a modified anti-C5 antibody treatment with certain amino acid substitutions that provide for longer serum half-lives and reduce the need for more frequent treatment. The application included:
A Jepson claim reciting, “[i]n a method of treating a patient by administering an anti-C5 antibody with an Fc domain, the improvement comprising” certain amino acid substitutions, wherein the modified antibody has “increased in vivo half-life.”
A non-Jepson claim directed to “a method of treating a patient by administering an anti-C5 antibody comprising” certain amino acid substitutions, wherein the modified antibody “has increased in vivo half-life.”
The specification provided one example of an anti-C5 antibody, 5G1.1, and three high-level examples of potential uses for anti-C5 antibodies. The examiner rejected the claims for lack of written description. Xencor unsuccessfully appealed the rejection to the Patent Trial & Appeal Board. Xencor then unsuccessfully petitioned the Board for reconsideration. Xencor appealed to the Federal Circuit, which resulted in a remand to the Board’s Appeals Review Panel (ARP).
The ARP concluded that Jepson claim preambles require written description support and that the preamble language of “treating a patient” was limiting – even without the Jepson claim format – because it gave life and meaning to the claim recitations “increased in vivo half-life” and “administering.” Because the specification did not provide a representative number of species to support the broad genus of anti-C5 antibodies, a description of conditions that can successfully be treated with an anti-C5 antibody, or even a single working example describing treatment with an anti-C5 antibody with the claimed modifications, the ARP found that the claims lacked written description and that Xencor had not shown that anti-C5 antibodies were well known. Xencor again appealed, arguing that “treating a patient” was not limiting and that Jepson preambles do not require written description support.
With respect to the preamble of the method claim, the Federal Circuit noted that Xencor agreed that the “administering” portion was limiting but nonetheless argued that “treating a patient” was not. Although a preamble can be split into limiting and non-limiting parts, the Court reasoned that the preamble here could not be neatly packaged into separate portions because the phrase “treating a patient” was directly connected through the word “by” to the phrase “administering an anti-C5 antibody,” and each phrase gave meaning to the other. The Court further explained that the entire preamble provided the raison d’être of the claimed method: When a patient is treated with the modified anti-C5 antibody, the treatment lasts longer, reducing the frequency of treatments. Accordingly, the Court agreed with the ARP that the recitation “treating a patient” was limiting.
The Federal Circuit next concluded that substantial evidence supported the ARP’s determination that the specification did not provide written description support for “treating a patient.” Because the specification was not limited to treating a particular disease, “treating a patient” meant “treating all patients and all diseases.” While the specification provided three examples of classes of diseases that might benefit from the claimed treatment, the Court agreed with the ARP that this disclosure was inadequate to demonstrate possession of a method of treating any particular disease, let alone all diseases.
Finally, the Federal Circuit explained that a Jepson claim preamble requires written description support because it is used to define the claimed invention and the claim scope. The Court cautioned that a patentee cannot obviate the written description requirement by using a Jepson claim to avoid the requirement that the inventor be in possession of the claimed invention – otherwise, a patentee could obtain a Jepson claim with a preamble that recited a time machine as well known in the art without describing a time machine. To provide adequate written description for a Jepson claim, the applicant must establish that what is claimed to be well known in the art actually is well known in the art. The Court explained that the amount of disclosure necessary varies depending on the level of knowledge of the person skilled in the art, the unpredictability of the art, and the newness of the technology.
Given the large number of possible antibodies in the anti-C5 antibody genus and the limited disclosure in the specification, the Federal Circuit affirmed the ARP’s determination that the Jepson claim lacked adequate written description.
Trump Administration Terminates Humanitarian Parole for Citizens of Cuba, Haiti, Nicaragua, Venezuela
Department of Homeland Security (DHS) Secretary Kristi Noem announced the termination of humanitarian parole for citizens of Cuba, Haiti, Nicaragua, and Venezuela, also known as the CHNV program, in the Federal Register on March 25, 2025. Humanitarian parole for citizens of these countries will expire no later than 30 days from March 25, 2025, or April 24, 2025.
CHNV beneficiaries who did not file some other immigration benefit application prior to publication of the termination notice must depart the United States on or before April 24, 2025, or the expiration of their humanitarian parole, whichever date is sooner. DHS will prioritize removal of CHNV beneficiaries without pending immigration applications who remain in the United States beyond the expiration of their humanitarian parole.
DHS has determined that, after termination of the parole, the condition upon which employment authorizations were granted no longer exists, and DHS intends to revoke parole-based employment authorizations.
The CHNV program was instituted by DHS under former President Joe Biden. It allowed citizens of Cuba, Haiti, Nicaragua, and Venezuela who obtained U.S. financial sponsors to enter the United States by humanitarian parole for up to two years. Once in the United States, parolees could apply for work authorization. Humanitarian parole was renewable, however, on Oct. 4, 2024, the Biden Administration announced it would not renew the program. About 530,000 individuals benefited from the CHNV program.
Seeking to enjoin termination of the program, on Feb. 28, 2025, Haitian Bridge Alliance and several individuals affected by the termination of the CHNV program filed a lawsuit in U.S. District Court for the District of Massachusetts, alleging violations of the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment. The lawsuit is pending.
Operation Allies Welcome, the humanitarian parole program for Afghanis who assisted U.S. forces during the war in Afghanistan, and Uniting for Ukraine, the humanitarian parole program for individuals fleeing the war in Ukraine, are unaffected by the latest announcement.
The Perils of Interpreting Your Own Rules Too Strictly, Especially When They Don’t Exist (UK)
So here it is, 2025’s first serious contender for the What On Earth Were They Thinking? Awards, an unfair dismissal case with a common-sense answer so clear you could see it from Mars, but which it nonetheless took five years and the Court of Appeal to arrive at.
Mr Hewston was employed by Ofsted as a Social Care Regulatory Inspector. In 2019, in the course of a school inspection, he brushed water off the head and touched the shoulder of a boy of 12 or 13 who had been caught in a rainstorm.
That contact was reported to Ofsted by the school as a case of “inappropriate touching”. The terms of the school’s reports were, said the Court of Appeal, “redolent with hostility against the inspectors and the inspection”. They described the incident in fairly hyperbolic terms – that contact had created a “very precarious situation” and had “put the safety of a student at risk”, both allegations which Ofsted itself quickly dismissed as arrant nonsense. It knew that the same school had made complaints about a number of previous inspectors, allegations not necessarily unconnected with its having serially failed to receive the Ofsted gradings it wanted.
Ofsted itself never made any suggestion that there had been any improper motivation on Hewston’s part. It accepted from the outset that the conduct was “a friendly act of sympathy and assistance”. Nonetheless, it dismissed Hewston for gross misconduct a month later. Why?
The disciplinary charges referred to his having without consent or invitation touched a child on the head and shoulder “contrary to Ofsted core values, professional standards and the Civil Service Code”. It was not Ofsted’s case that any of those values or standards or the Code contained any explicit reference to the circumstances in which school inspectors should make physical contact with a child, still less any blanket no-touch rule. Nonetheless, Hewston found himself in an impossible position at the disciplinary Hearing – even though promising that he had learnt his lesson, the more he denied that he had acted improperly (not least in the absence of any such rule), the more fuel he added to Ofsted’s claimed view that he could not be trusted not to do it again.
By the time the question reached the Court of Appeal, the issues had for practical purposes been boiled down to whether it was reasonable for Ofsted to treat that conduct as justifying Hewston’s dismissal, and as part of that, whether even without that no-touch rule, Hewston should have appreciated that his conduct could lead to his dismissal.
The ruling was clear that Hewston’s actions had been a misjudgement, however well-intentioned, but also that Ofsted could not reasonably have determined that they were sufficient to justify his dismissal. There had never been any safeguarding issue nor any risk to the child. Hewston had made it clear that he would undertake whatever training was required and would not repeat his conduct. Even if Ofsted thought that he harboured some continuing doubt about whether he had in fact acted inappropriately, it had no real reason to fear a recurrence. In any case, it was not allowed to turn sub-dismissable conduct into gross misconduct merely because Hewston didn’t seem in its perception to show the appropriate remorse or understanding.
Most of all, Hewston’s trip to the Court of Appeal was successful for the reasons in one short paragraph in a judgement of nearly 30 pages – the “fundamental point was that in the absence of a no-touch rule or other explicit guidance covering a situation of the relevant kind, Hewston had no reason to believe that he was doing anything so seriously wrong as to justify dismissal”. As a result, said the Court, it seemed “deeply regrettable that [Hewston], who was an experienced inspector with an unblemished disciplinary record on safeguarding issues, should have been summarily dismissed for conduct which, on any reasonable appraisal, amounted to no more than a momentary and well-meaning lapse of professional judgement of a kind which he was most unlikely ever to repeat”.
So for employers, the immediate moral of this story is that if you have a principle of conduct in your business which is as important to you as Ofsted said its non-existent no-touch rule was to it, make it express. And the more stringent that rule is, the more it might lead to dismissal for conduct which isn’t on its face that big a deal, the louder you have to shout about it.
But even then, that is not necessarily the end of the matter. As employer, you cannot safely go straight from breach of that rule to dismissal without consideration of the specific circumstances of the case. That is particularly the position where the wider the rule, the easier it is to breach it for wholly innocuous reasons. Even writing as a committed adherent to the instructions on packs of dishwasher tablets to “keep well away from children”, there are limits. Could a school inspector touch a child to help it up after a playground accident? To pull it out of the way of a car or a collision with another child, something corrosive spilt in the Chemistry Lab, an errant javelin on Sports Day? Could you sit it down and dry its tears if it were clearly distressed about something, or help it to the Sick-room? Exactly where is the line between protecting a child’s physical health and safety on the one hand and its comfort, happiness or wellbeing on the other? With the possible exception of that one about not taking the boron rods out of nuclear reactors, every hard rule has its fuzzy edges.
As soon as Ofsted accepted that no harm to the child had been intended or done, that should have been the end of the matter. A warning at its absolute highest. However, to pursue the principle of a rule which did not exist as far as the Court of Appeal at vast cost to both Hewston and the taxpayer shows, with respect, a serious loss of self-awareness from the point of dismissal and ever since. Don’t let this happen to you – remember that fairness trumps rules every time.
This Week in 340B: March 18 – 24, 2025
Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: Contract Pharmacy; Rebate Model
In a case by a drug manufacturer challenging a state law, the intervenor defendant filed a brief in support of its motion to compel discovery, and the drug manufacturer filed a brief in opposition to the intervenor’s motion for judgment on the pleadings.
In four cases against the Health Resources and Services Administration (HRSA) alleging that HRSA unlawfully refused to approve drug manufacturers’ proposed rebate models, the intervenor defendants filed a cross motion for summary judgment and opposition to the plaintiff’s motion for summary judgment.
In one such case, 37 state and regional hospital associates filed a motion for leave to file an amici brief in support of HRSA.
Massachusetts Court Denies Certification of Privacy Class Action for Failure to Meet Ascertainability Requirement
On February 14, 2025, in Therrien v. Hearst Television, Inc., the District of Massachusetts denied a motion for class certification due to the plaintiff’s failure to meet the implied ascertainability requirement of Rule 23. The court concluded that the named plaintiff’s claims for unlawful disclosure of personally identifiable information could not be maintained on a class-wide basis because the proposed method for identifying proposed class members was “administratively infeasible” and raised due process concerns.
Therrien’s Video Privacy Protection Act Claim Based on Geolocation Data
Charles Therrien brought this case on his own behalf and other similarly situated individuals against Hearst Television, Inc. (“HTV”) for allegedly unlawfully disclosing his personally identifiable information to third parties in violation of the Video Privacy Protection Act (VPPA), 18 U.S.C. § 2710. The VPPA prohibits a videotape service provider from knowingly disclosing personally identifiable information concerning any of its consumers.
HTV is a news and weather broadcaster that offers mobile phone apps on which users can read articles and watch associated videos. The apps collect users’ geolocation data. To send push and email updates, HTV utilizes Braze, a third-party software-as-a-service-provider. Although users have the option to enable or disable sharing geolocation data, when it is enabled, users’ geolocation data is shared with Braze.
In addition, HTV also uses Google Ad Manager to send targeted advertisements to its apps’ users. Like Braze, if a user has enabled geolocation services, the geolocation data is shared with Google.
Thus, Therrien claimed that, because his geolocation data was shared with third parties, HTV violated the VPPA.
Therrien’s Proposed Class Definition of Mobile App Users
Therrien sought certification for this class action claim, for which he was required to establish the four threshold requirements of Rule 23(a) — numerosity, commonality, typicality, and adequacy — as well as the two additional prerequisites of Rule 23(b)(3) – predominance and superiority.
Although not one of the four threshold requirements of Rule 23(a), ascertainability is an implicit requirement that a plaintiff also must meet for class certification. Ascertainability requires that the class is “currently and readily identifiable based on objective criteria.” Additionally, the plaintiff’s proposed mechanism for determining class members must be both administratively feasible and protective of the defendant’s Seventh Amendment and due process rights.
To assess whether Therrien met the Rule 23 requirements, the court scrutinized the proposed class definition. In the present case, Therrien’s proposed class was defined as, “All persons in the United States that (i) downloaded one of the Class Apps onto their mobile phone, (ii) enabled location permissions for the Class App for at least 250 sessions over a period of at least one month, and (iii) watched at least ten (10) videos between May 5, 2021, and April 16, 2024 (the “Class Period”).”
Courts considering class definitions will often assess the way the definition has been drafted, but in this case, the court’s analysis did not turn on the drafting of the definition but on the validity of Therrien’s proposed mechanism for identifying class members.
Court’s Critique of Therrien’s Proposed Methodology and Denial of Certification
For purposes of identifying class members, Therrien aimed to rely on an expert witness’s methodology using geolocation data. This method would involve analyzing geolocation data points to generate names of mobile app users, followed by testimony from each user confirming that the information obtained belongs to them and is accurate.
The court highlighted that this method would be administratively infeasible and could potentially violate HTV’s due process rights, running afoul of In re Nexium Antitrust Litig. Expanding upon the infeasibility of this method, the court noted that, for addresses where there are multiunit apartment buildings with hundreds of occupants, geolocation points could not be used to identify specific unit numbers, and therefore specific users, of the HTV apps.
Thus, the generated user data could not be used to differentiate putative class members from other users, making it nearly impossible to provide notice of a pending class action. Applying the reasoning from In re Asacol Anitrust Litig., the court noted that the proposed process would likely result in thousands of class members waiting to provide testimony on individual issues, which would predominate over common ones.
Moreover, the court explained that, although affidavits may be sufficient for differentiating between individuals who were injured and who were not injured, testimony used as part of a party’s affirmative case cannot be used to certify a class, “without providing the defendant an opportunity to litigate its defenses.” Because the determination of whether HTV shared personally identifiable information with Braze and Google is an essential element of the VPPA claim, this information could not be used for the purpose of fulfilling the ascertainability requirement.
Based on the foregoing administrative hurdles and due process considerations, the court denied the motion for class certification.
The court’s analysis highlights the importance of a sound mechanism for identifying class members and the potency of an ascertainability challenge if defense counsel can effectively illustrate practical challenges for the court.
More than anything, this case makes clear that it would be imprudent for litigants to treat ascertainability as an afterthought in their Rule 23(a) analysis because, as the holding of this court illustrates, failing to meet ascertainability is fatal for class certification within the First Circuit.
Finally, the decision in Hearst Television highlights that venue can be outcome determinative in class action litigation, where there is a persistent circuit court split on whether a class representative must prove an administratively feasible method of identifying absent class members as a precondition for class certification under Rule 23, with the First Circuit aligned with the Third and Fourth Circuits and the Second, Sixth, Seventh, Eighth, Ninth, and Eleventh Circuits following a more permissive standard.
Until the Supreme Court speaks on this division that is ripe for review, litigants should continue to address ascertainability as a critical issue at the certification stage.
Ghost Guns and the Bankruptcy Code: Neither Provides Ammunition for Dismissing Actions – SCOTUS Today
The Supreme Court decided two cases today, continuing the release of opinions on which the Court is not deeply divided. The tougher ones are yet to come.
Despite the fact that today’s cases come from highly specialized areas of practice—firearms control and bankruptcy—both are interesting because they involve the interpretation of text, as Justices of all stripes continue to apply textual, literalist principles of interpretation rather than couching their views in a broader, arguably political, analysis of implied congressional intent.
The more closely watched of today’s two cases is Bondi v. Vanderstok, in which an interesting array of Justices—Justice Gorsuch wrote for himself and six other members of the Court (with Justices Thomas and Alito dissenting)—upheld a 2022 regulation of the Biden administration governing the sale and possession of so-called “ghost guns,” i.e., firearms made from kits constructed from untraceable parts. The regulation in question subjects the do-it-yourself “ghost gun” kits to the same requirements as fully assembled firearms, requiring serial numbers, background checks, and records of sales or transfers to private buyers. The Gorsuch opinion endorsed the position that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) had the authority to issue the rule under the Gun Control Act of 1968 (GCA). The law “embraces, and thus permits ATF to regulate, some weapon parts kits and unfinished frames or receivers,” Gorsuch wrote. One notes that the Trump administration took no position in the case. The 7-2 decision keeps in force the 2022 regulation. Justice Gorsuch’s leadership as to the decision—a rare reversal of the U.S. Court of Appeals for the Fifth Circuit—is particularly interesting because of his alignment with three conservatives (Chief Justice Roberts, the increasingly independent Justice Barrett, and Justice Kavanaugh) and the Court’s three liberals.
Turning to the stated language of the GCA, Justice Gorsuch writes that the GCA authorizes ATF to regulate “any weapon . . . which will or is designed to or may readily be converted to expel a projectile by the action of an explosive.” This language creates two requirements. First, there must be a “weapon.” Second, the weapon “must be able to expel a projectile by the action of an explosive, designed to do so, or susceptible of ready conversion to operate that way.” According to the Court, “[A]t least some kits will satisfy both.” Rejecting the application of the rule of lenity and the rule of constitutional avoidance, Justice Gorsuch held that neither of those rules “has any role to play where ‘text, context, and structure’ decide the case. . . . The GCA embraces, and thus permits ATF to regulate, some weapons parts kits and unfinished frames or receivers, including those we have discussed. Because the court of appeals held otherwise, its judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.”
Justice Thomas dissented, arguing that the statutory terms did not cover the unfinished frames in the parts kits and that those kits, by themselves, did not fit the definition of a “firearm.” Justice Alito argued that the majority decided the case on grounds that were not raised or decided in the courts below. Both dissents are swamped by the strong bipartisan majority that, as Justice Gorsuch made clear, was conscious of the regulation’s origin in the wake of the assassination of Dr. Martin Luther King, Jr.
From a Court “politics” standpoint, the other case decided today, United States v. Miller, is just as interesting. In this case, Justice Jackson’s majority opinion was joined by all of the other Justices, save for Justice Gorsuch, who dissented. The case involved the power of a bankruptcy trustee under the Bankruptcy Code, 11 U.S.C. §544(b)(1), to set aside, or “avoid,” certain fraudulent transfers of a debtor’s assets. The Court held that the Bankruptcy Code’s waiver of sovereign immunity only waives sovereign immunity with respect to the federal cause of action created by Section 544(b), which gives the trustee the power to avoid certain transfers that would be “voidable under applicable law”—that is, voidable outside of bankruptcy proceedings. However, it doesn’t encompass sovereign immunity for state law claims nested within that federal claim. Ultimately, the case is remanded to allow the courts below to consider an argument based on state law that was not briefed or considered by the Supreme Court.
Again, we note that the Court continues to deal with the “easy” stuff. There remain more than a few storm clouds on the horizon. So, keep your rubber boots on and look out for lightning in the days to come.
HOTLY LITIGATED: Pennsylvania Court Finds Plaintiff Implicitly Consented to Third-Party Tracking Software
A recent ruling in Popa v. Harriet Carter Gifts, Inc. (W.D. Pa. March 24, 2025) has reaffirmed the role of privacy policies in establishing user consent for online tracking. After being remanded by the Third Circuit, the Pennsylvania District Court considered a motion for summary judgement focused solely on the issue of whether the plaintiff consented to alleged interception of her data under Pennsylvania’s Wiretap Act. Applying the reasonable person standard, the Court ruled that Popa had constructive notice of the website’s privacy policy – contained in a browsewrap agreement – and therefore consented to the use of tracking software.
The Allegations
Plaintiff Ashley Popa brought a class action against Harriet Carter Gifts, Inc. and NaviStone, Inc. alleging that they violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act of 1978 (“WESCA”) by unlawfully intercepting her data while she shopped on Harriet Carter’s website (the “Website”).
WESCA prohibits the interception of electronic communications without the prior consent of all parties to the communication.
The Privacy Policy
The Website had a privacy policy hyperlinked in its footer, which both parties and their experts agreed was a common practice for commercial websites. Interestingly, the parties also agreed that in 2018, it would have been a “reasonable conclusion” for a company to believe that it ought to present the privacy policy in this manner. The hyperlink was labelled “Privacy Statement” and was in white font against a blue background.
Harriet Carter’s privacy policy broadly addressed its data collection and use practices: it stated that Harriet Carter collected customer information (without addressing what information) and explained that cookies were used to keep track of shopping carts and deliver targeted content.
In a separate section titled “Who Else Has Access to the Information I provide to Harriet Carter.com?” the policy also addressed third party access to customer information through use of a cookie or pixel tag – which Harriet Carter deemed “industry standard technology”. The policy noted that no personally identifiable information would be collected through this process, but third parties may pool the information from Harriet Carter’s website with other sources of information that could include the customer’s name and mailing address.
Popa testified that she had never reviewed Harriet Carter’s privacy policy.
The Motions
In 2020, the Defendants filed a motion for summary judgement which was granted by the District Court. The Court held that there was no interception under WESCA because NaviStone, which operated the program that caused the alleged interception, was a direct party to the communications and because the alleged interception occurred outside Pennsylvania and was therefore outside the scope of WESCA. Following an appeal by Popa, the Third Circuit Court of Appeals reversed, holding that there is no sweeping direct-party exception under WESCA and that there was a genuine issue of material fact as to where the interception occurred.
The Third Circuit also noted that the issue of whether Harriet Carter posted a privacy policy and the sufficiency of the privacy policy was not addressed by the District Court and remanded this issue to the Court.
On remand, Defendants filed a second motion for summary judgement, focusing solely on the issue of consent and contending that Popa was on constructive notice of Harriet Carter’s privacy policy and therefore consented to the communications being recorded as described therein.
The Court’s Analysis
In its analysis, the Court noted the objective standard to interpret the consent provisions of WESCA – whether a reasonably prudent person can be deemed to have consented under the circumstances. The Court looked to the decision in Commonwealth v. Byrd, where the Pennsylvania Supreme Court held that actual knowledge that communications may be recorded is not required to satisfy the consent requirement under WESCA.
Notably, the Court took into consideration the ubiquitous use of tracking technologies on the internet and stated that, “when determining whether a reasonable person can be deemed to consent to an interception under WESCA, it must be mindful of the reality of internet communication.” Therefore, it held that while the nature of the internet does not confer blanket implied consent to interception under WESCA, “a reasonably prudent person has a lower expectation of privacy on the internet” than on other technologies (like telephones) which do not use cookies, algorithms, and trackers.
“[A] reasonably prudent person has a lower expectation of privacy on the internet“
Next, the Court considered the scope of Harriet Carter’s privacy policy, looking specifically at whether a reasonable person could have been alerted that third parties, like NaviStone, may access information about consumers’ activities on the Website. The Court answered affirmatively – the privacy policy made clear that the Website used tracking cookies, and that Harriet Carter may share information about users’ activities with third parties. The Court also rejected Popa’s argument that privacy policy was insufficient because it did not contain details about the identity of the third parties or the specific type of cookies used, holding that such “granular details” were immaterial because WESCA focuses on the event of interception rather than the specific means of thereof.
Lastly, the Court considered whether Popa consented to NaviStone’s tracking on the Website. The central question here was not whether Popa had actual knowledge of the alleged interceptions (the record established that Popa never reviewed the privacy policy), but rather, whether a reasonable person in her position could have known of the disclosures in the privacy policy. The Court acknowledged that privacy policy on the Website was in the form of a “browsewrap agreement”, which does not require a user to click or take any affirmative action to consent to its terms. While such agreements are routinely enforced when a user has actual notice, in the absence of actual knowledge the court must look to the visibility and accessibility of the browsewrap agreement to determine whether it placed a user on inquiry notice of its terms.
The Court held that the privacy policy on Harriet Carter’s website was reasonably conspicuous based on the appearance and layout of the Website: it was labelled “Privacy Statement”, located at the center and bottom of each page, the hyperlink was in white font contrasting against a blue background, and a link to the policy could also be found in a drop-down menu on the left side of the website. These factors led the Court to find that a reasonable person in Popa’s position had constructive notice of the terms in the privacy policy, and that Popa constructively consented to the interception described in the policy. Therefore, there was no violation of WESCA.
Popa’ s contention that the presence of NaviStone’s program meant that merely visiting Harriet Carter’s website would give rise to an interception before a reasonable user had a chance to view the privacy policy was rejected. The Court analogized to someone hanging up a phone call after hearing a disclosure that the call was being recorded – there would be no interception under WESCA because WESCA only applies to “contents” of communications. Similarly, to the extent that Popa was concerned about privacy, she could have immediately reviewed the privacy policy and, if concerned, left the page, and this would not lead to the interception of “content” under WESCA.
Takeaways
Though based on a state statute, this ruling signifies a shift in the hotly litigated arena of website tracking software.
For businesses, Popa may offer some respite – while explicit clickwrap agreements remain the gold standard, this case suggests that browsewrap agreements may still hold up in court if they are reasonably conspicuous and sufficiently disclose the use of third party tracking software. As digital privacy law continues to evolve, courts are likely to place greater emphasis on reasonable user expectations, meaning online users may need to be more proactive in understanding how their data is being collected.
Perhaps most interestingly, the Pennsylvania District Court’s willingness to acknowledge the widespread (maybe even indispensable) use of cookies and trackers demonstrates a growing understanding of the “reality of internet communication”. It will be interesting to see whether a similar approach is adopted by courts states such as California, with its particularly stringent privacy laws.
Supreme Court Declines to Revisit NLRB Deference Post-Loper Bright
On March 24, 2025, the Supreme Court declined to review a Ninth Circuit decision that provided an opportunity to clarify how its landmark decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024) affects the degree of deference federal courts shall afford the National Labor Relations Board (“NLRB” or “Board”) when the Board interprets the National Labor Relations Act (“NLRA” or “Act”).
As we covered here, Loper Bright overturned the 40-year-old Chevron doctrine, which required courts to defer to a federal administrative agency’s reasonable interpretation of ambiguous statutes. Post-Loper Bright, courts are now required to apply their own construction of the law.
In declining to review the underlying Ninth Circuit decision issued on February 20, 2024, the Supreme Court let stand the court’s ruling that upheld the NLRB’s finding that an employer cannot unilaterally cease union dues checkoff after a collective bargaining agreement expires (discussed here). The Ninth Circuit’s decision was predicated on the Chevron standard, which requires deference to the Board’s interpretation of an ambiguous provision of the NLRA – like dues checkoff – if the Board’s interpretation “is rational and consistent with the Act.”
The Supreme Court gave no rationale for declining review.
Interestingly, this denial of certiorari stands in stark contrast to the Supreme Court’s decision in December 2024 to vacate and remand a D.C. Circuit opinion that upheld a Board ruling on the successor-bar doctrine, where the high court gave specific instructions to review that ruling “for further consideration in light of” Loper Bright, which we covered here. The successor-bar doctrine precludes a new employer from withdrawing recognition from an incumbent union for at least six months after that employer assumes control from its predecessor.
While the Supreme Court’s decision to decline review of the Ninth Circuit’s ruling leaves unresolved the issue of how Loper Bright affects the NLRB, it may ultimately just delay inevitable resolution of a potentially emerging circuit split around this issue.
Though the D.C. Circuit—which has jurisdiction to hear any appeal of a NLRB decision—held in July 2024 that Board decisions continue to warrant a “very high degree of deference” post-Loper Bright, as we have covered here, there is disagreement. Indeed, the very next month the Sixth Circuit held that it would “not defer to the NLRB’s interpretation of the NLRA, but exercise independent judgment in deciding whether an agency acted within its statutory authority.” Rieth-Riley Constr. Co. v. Nat’l Lab. Rels. Bd., 114 F.4th 519, 528 (6th Cir. 2024) (citing Loper Bright, 144 S. Ct. at 2262).
Ultimately, if the Supreme Court does change the deferential standard that courts have historically provided Board decisions, then that could profoundly alter how parties litigate NLRB cases. If that were to occur, then parties may head to court more frequently to overturn Board decisions with which they disagree.
We will continue to monitor the manner in which federal courts review NLRB decisions post-Loper Bright.