Litigation / Trial Practice – Page 7

Surface vs. Mineral Owners: Texas Supreme Court Settles Salt Cavern Ownership Dispute

The Texas Supreme Court has settled the issue of who owns the voids, known as salt caverns, created in subsurface salt formations (whether naturally occurring or caused as a result of salt mining operations). In Myers-Woodward, LLC v. Undergrounds Services Markham, LLC, the court affirmed the appellate court decision (previously reported on by Bracewell in a client alert on February 24, 2023), holding that surface owners, rather than mineral owners, own subsurface salt caverns. (— S.W.3d —, No. 22-0878, 2025 WL 1415892, at *1 (Tex. May 16, 2025)). This is true even when the mineral owner’s activities create such caverns, as was the case in Myers-Woodward.
Rather than following the outlier, Mapco, the Texas Supreme Court decided to continue defining the scope of subsurface ownership outlined in decades of Texas case law. 808 S.W.2d 262, 264 (Tex. App.—Beaumont 1991, rev’d on other grounds, 817 S.W.2d 686 (Tex. 1991)). See e.g., Humble Oil & Ref. Co. v. West, 508 S.W.2d 812, 815 (Tex. 1974) (characterizing the surface owner’s interest as ownership of the “reservoir storage space”); Regency Field Servs., LLC v. Swift Energy Operating, LLC, 622 S.W.3d 807, 820 (Tex. 2021) (“[T]he surface owner, and not the mineral lessee, owns the possessory rights to the space under the property’s surface.”). The court stated:
“Absent an agreement otherwise, ownership of underground salt does not include ownership of underground empty space within or around a salt formation. Nor does it include a right to use that empty space for purposes unrelated to the production of the property’s minerals.” Myers-Woodward, 2025 WL 1415892 at *1.
Salt caverns have become progressively more useful in oil and gas storage, making the rights to own and use them especially valuable. Mineral owners will need to explicitly contract for the right to utilize these vacant caverns to capitalize on their increasing hydrocarbon storage potential. Otherwise, these rights belong to the surface owners.
With this ruling, the Texas Supreme Court has ended the storage wars, for now.

Circuit Split Deepens on “Harm” as a Failure to Accommodate Element

The split among federal circuit courts of appeal as to whether a disabled worker must show harm in bringing a failure to accommodate claim continues. Recently, the Fifth Circuit joined the majority of circuits in finding that harm is not an element of a failure to accommodate claim.
On May 16, 2025, the Fifth Circuit reversed, in part, a lower court decision that required harm as an element of a failure to accommodate claim.
Strife v. Aldine Independent School District, Case No. 24-20269, Plaintiff Strife, an Army veteran who served in Operation Iraqi Freedom and was injured during service, became a teacher after her discharge from the Army. Subsequently, Strife was promoted to work in human resources for the school district. Strife had a service dog to assist with both her physical and psychological disabilities, including balance, fall protection, and PTSD mitigation.
Strife requested the accommodation of allowing her service dog to accompany her at work — an accommodation that was not approved for six months, and only approved after she filed a lawsuit, and an injunction hearing was pending. The Fifth Circuit decision focused on her failure to accommodate claim — specifically, whether this six-month delay was a failure to accommodate.
The Fifth Circuit found the district court improperly dismissed this claim because the dismissal relied in part on Plaintiff’s failure to allege an injury during the accommodation request period. While the district court found this lack of harm rendered the pleading insufficient, the Fifth Circuit disagreed and reversed.
The Fifth Circuit decision that a failure to accommodate claim does not require the element of harm aligns with existing decisions out of the First, Second, Third, Fourth, Sixth, Seventh, Tenth, and D.C. Circuits. The Eighth, Ninth, and Eleventh Circuits have held otherwise.
At this time, employers should:

be aware of the differing standards between circuits and plan litigation strategy accordingly;
continue to heed the most recent ruling from the Supreme Court in Muldrow v. St. Louis that workers must, for a Title VII claim, only show “some harm” that left them “worse off” as to their employment; and
adhere to the obligation to engage in the interactive process when managing accommodation requests.

Oregon Expands Tax Court Access: HB 2119 Grants Associational Standing to Membership Organizations

On May 28, 2025, Oregon Gov. Tina Kotek signed HB 2119 into law. Having received strong support in the Oregon legislature, the law allows for associational standing in state tax cases—that is, membership organizations now have statutory standing to seek declaratory relief on their members’ behalf in the Oregon Tax Court. Associational standing may be granted for matters involving any number of state and local tax issues, including personal income, property, corporate excise, etc.
HB 2119 codifies Oregon’s requirements for associational standing, which mirror the long-standing federal three-prong test established in the U.S. Supreme Court case Hunt v. Wash. State Apple Advert. Comm’n.1 To have associational standing there must be an adverse impact on at least one of the association’s members, the issue must be germane to the association’s purpose, and the matter must not require the direct participation of the impacted member or members.
HB 2119 is relatively simple, but it brings a significant change to Oregon. Under the prior rule, only affected taxpayers could challenge a tax law for their individual harm and the resolution of a single issue could take more than a decade. Once a challenge reached the General Division of the Oregon Tax Court, the petitioner would also be required to pay the tax they were disputing. This process created an impediment for businesses and individuals to bring otherwise worthy tax challenges. Associational standing may help members share the burdens of litigation and speed up the resolution of tax questions and reduce burdens on the court system.
The passage and implementation of HB 2119 follow several years of advocacy by organizations such as Oregon Business and Industry and the Smart Growth Coalition. The new law may help taxpayers address and seek clarity on Oregon tax issues.

1 432 U.S. 333 (1977).

District Court Interprets Multiemployer Plan Fee-Shifting Provision to Encompass Attorneys’ Fees and Costs Incurred in Related Litigation

A multiemployer plan that prevails in an action to collect delinquent contributions or withdrawal liability is statutorily entitled to recover reasonable attorneys’ fees and costs “of the action.” In International Painters & Allied Trades Industry Pension Fund v. Florida Glass of Tampa Bay, Inc., No. 23-cv-00045, 2025 WL 712965 (D. Md. Mar. 5, 2025), the court held that the statute permits a plan to recover not just the fees and costs incurred in the collection action, but also those incurred to defend a related action.
Florida Glass of Tampa Bay, Inc. was a contributing employer to the International Painters and Allied Trades Industry Pension Fund. Following Florida Glass’s complete withdrawal from the Fund, the Fund filed suit to collect over $1.5 million in withdrawal liability from Florida Glass and its controlled group members. While that action was pending, the controlled group members sued the Fund and its attorneys in Florida state court, alleging that the Fund’s collection action constituted defamation and abuse of process under Florida law. After the Florida action was dismissed with prejudice, the court in the collection action granted the Fund’s motion for summary judgment and awarded it withdrawal liability, interest, and liquidated damages. The court also granted the Fund’s motion for attorneys’ fees and costs, which included the amounts incurred in both the collection and Florida actions. The court held that the phrase “of the action” in 29 U.S.C. § 1132(g)(2)(D) meant all fees and costs that were or should have been incurred in the collection action. The court reasoned that defendants should have raised their claims as counterclaims in the collection action rather than commencing a parallel action. The court indicated that its ruling was based in part on the need to effectuate the statutory goal of preserving fund assets, as defendants’ actions unnecessarily multiplied the Fund’s litigation expenses by requiring it to litigate two separate actions.
Proskauer’s Perspective
The decision is notable because it interprets ERISA’s mandatory fee-shifting provision for collection actions to encompass fees incurred in parallel actions where fees would not otherwise be recoverable or where the award is not mandatory. Plans and employers should consider whether the decision lays the groundwork for a mandatory award of fees to a plan that, in addition to successfully pursuing an employer for delinquent contributions or withdrawal liability, prevails in arbitration by the employer to challenge the amount of the liability.

Lamborghini Accused of Driving Away With Former Partner’s Trade Secrets

Prema Engineering S.r.l. (“Prema Engineering”) has accused automaker Automobili Lamborghini S.p.A. and Automobili Lamborghini America, LLC (collectively, “Lamborghini”) of stealing Prema Engineering’s intellectual property and trade secrets it supplies to Hypercars used in endurance racing.
In Prema Engineering S.r.l. v. Automobili Lamborghini S.p.A., filed in the United States District Court for the Western District of Texas, Austin Division, Prema Engineering alleges that in 2024, Lamborghini, while in a racing partnership with Prema Engineering and Iron Lynx racing team, stole Prema Engineering’s high-tech trade secret-protected steering wheel software in order to use it in Lamborghini’s new racing partnership with Riley Motorsports, a competitor of Prema Engineering and Iron Lynx.
Prema Engineering alleges that Lamborghini entered into a partnership with the Iron Lynx racing team, pursuant to which Lamborghini sold two Lamborghini-manufactured Hypercars to the Iron Lynx team and agreed to provide spare parts and other supply-related assistance for the Hypercars. Under the partnership, Prema Engineering was the exclusive provider of all servicing, maintenance, engineering and technical support to the Iron Lynx racing team.
The steering wheel software at the center of the action involves a “proprietary package of computer code developed by engineers and technicians at Prema Engineering,” referred to as steering wheel setups (“Setups”), that Prema Engineering “developed and customized” using its team’s forty years of experience in formula and endurance racing. Per the Complaint, the “Setups are customized for each racetrack and race session, and they enable the collection and processing of data collected from the Hypercars while they are running.” The Setups are also used to customize the steering wheel to the specific driver to implement during a race “the team’s strategies and maximize the Hypercar’s performance.”
Prema Engineering contends it took steps to secure the confidentiality of its Setup software, including maintaining possession of both the steering wheels containing the Setup software and the Iron Lynx Hypercars. Prema Engineering also alleges it repeatedly sent written reminders to Lamborghini that the Setup software was “proprietary to Prema Engineering” and Lamborghini did not have permission to use the Setup software outside of specific testing and racing activities.
As set forth in greater detail in the Complaint, Prema Engineering alleges that, during the 2024 racing season, Lamborghini took advantage of a specific time when Lamborghini was given access to a Hypercar installed with a steering wheel containing Prema Engineering’s Setup to copy the Setup for Lamborghini’s own use. Prema Engineering claims it discovered Lamborghini’s theft of its proprietary Setup software after Lamborghini returned to Prema Engineering a simulator steering wheel it had borrowed for racing simulator testing. The borrowed simulator steering wheel was provided to Lamborghini without any software. The steering wheel’s log data showed the Setup was used a number of times during a two-week period that the steering wheel had been in Lamborghini’s possession. However, when Lamborghini returned the simulator steering wheel, Prema Engineering discovered that the simulator steering wheel contained a copy of its Setup software from a prior testing event. Prema Engineering states it never provided this Setup to Lamborghini and never gave Lamborghini permissions to access or use copies of any of its Setups.
Prema Engineering also alleges that Lamborghini misappropriated at least four other Setups it had been granted access to over the course of the 2024 season. Prema Engineering states that it discovered the theft of these Setups during the 2025 racing season when Prema Engineering identified from views of Lamborghini’s Hypercar steering wheel being used with Riley Motorsports other features of Prema Engineering’s Setups that are contained within the four allegedly stolen Setups. Prema Engineering maintains that at no point did Lamborghini have permission to download, use or disclose its proprietary software.
Prema further alleges that Lamborghini used its stolen Setup software to aid in developing a new racing partnership with Riley Motorsports for the 2025 racing season. The Complaint alleges that by using the information from Prema Engineering’s software, Lamborghini and Riley Motorsports were able to “bypass critical engineering and testing phases that would otherwise take years to complete, granting them an unfair competitive advantage.”
Prema Engineering’s Complaint alleges Lamborghini’s misconduct amounted to violations of the Defend Trade Secrets Act, the Computer Fraud and Abuse Act, the Copyright Act, the Texas Uniform Trade Secrets Act, and the Texas Harmful Access by Computer Act.
Prema Engineering’s action against Lamborghini highlights the importance of high-tech industries protecting their trade secrets from theft or inadvertent disclosure. As this case demonstrates, in today’s world a high-tech company’s internal years of knowledge, experience and proprietary software are no longer confined to its internal engineering departments. Companies that seek to utilize their proprietary software in partnership with other high-tech products must take appropriate precautions to safeguard their trade secrets, such as clearly setting forth in written agreements the terms and conditions under which the proprietary software can be utilized and shared. When feasible, companies should also set up additional internal controls that would alert the company that the security of its intellectual property has been breached.

Humanitarian Parole Uncertainty: SCOTUS Halts CHNV Program, While Lower Court Orders Continued for Processing for CHNV, Afghans, Ukrainians

The U.S. Supreme Court has lifted an April 14, 2025, temporary injunction blocking the Department of Homeland Security’s (DHS’s) decision to terminate humanitarian parole for individuals from Cuba, Haiti, Nicaragua, and Venezuela under the CHNV program. Noem v. Svitlana Doe, et al., No. 24A1079 (May 30, 2025).
U.S. District Court Judge Indira Talwani’s order is stayed pending the outcome of an appeal filed by DHS in the U.S. Court of Appeals for the First Circuit and a decision on a petition for writ of certiorari to the Supreme Court regarding the merits of the case, if one is ultimately sought by either side.
The CHNV program has allowed approximately 450,000 people to live and work legally in the United States.
DHS has not yet provided guidance regarding the status of CHNV parolees in light of the Supreme Court decision.
On May 28, 2025, Judge Talwani ordered DHS to resume processing of parole and reparole applications for individuals covered under the Uniting for Ukraine, Operation Allies Welcome (Afghanistan), Central American Minors Parole, Family Reunification Parole, Military Parole-In-Place, and CHNV Humanitarian Parole.
It is not clear whether DHS will continue to adjudicate parole applications for CHNV beneficiaries in light of the Supreme Court decision.

New York Court of Appeals Finally Agrees to Hear Constitutional Challenges to FAPA

After years of denying review, the New York Court of Appeals — the state’s highest court — agreed to address the question of whether New York’s momentous Foreclosure Abuse Prevention Act (FAPA) applies retroactively. On May 20, 2025, the New York Court of Appeals accepted review of two (2) cases that present challenges to Section 7 of FAPA, a provision limiting mortgage lenders’ defenses against statute of limitations challenges.
Under New York law, once a mortgage lender accelerates a mortgage loan, the lender has six (6) years to foreclose on the property, otherwise the mortgage may be extinguished. Following its enactment on December 30, 2022, FAPA has severely restricted lenders’ ability to stop or reset the six (6) year clock and, as relevant here, it has prevented mortgage lenders from arguing that the clock never started in the first place. Debate has raged about whether FAPA’s rules apply retroactively, which would mean that actions taken by mortgage lenders prior to the enactment of FAPA now have a different legal effect than they did when those actions were taken. When passing FAPA, members of the New York legislature stated that the law’s purpose was to overturn judicial decisions that sanctioned the use of the foreclosure process in abusive ways. New York’s intermediate appellate courts have noted this apparent legislative intent, along with FAPA’s text to conclude that the law was intended to apply retroactively. The defendants in Van Dyke and Article 13 LLC — along with litigants in many other cases — contend that retroactive application of FAPA’s provisions are unconstitutional.
Van Dyke v. U.S. Bank, N.A.is a New York state case initiated before FAPA’s enactment. There, a borrower brought a quiet title action against a mortgage lender, seeking to have her mortgage expunged. The borrower claimed that a previously discontinued 2009 foreclosure action had started the six (6) year statute of limitations and, because the statute of limitations had since expired, the borrower’s mortgage should be expunged. The state trial court agreed with the borrower, retroactively applying FAPA and concluding that such application did not violate the U.S. Constitution or New York Constitution. The intermediate appellate court affirmed the trial court in every respect in a February 18, 2025, opinion. Now, the New York Court of Appeals will review and opine for the first time on the constitutionality of FAPA’s retroactivity.
Article 13 LLC v. Ponce de Leon Fed. Bankis also a quiet title action. This case was initiated in 2020 — before FAPA’s enactment — in the United States District Court for the Eastern District of New York. There, a junior mortgagor sought to expunge a senior mortgage on the subject property based on the theory that the senior mortgagor initiated, then discontinued, a foreclosure action in 2007. According to the junior mortgagor, this prior action accelerated the loan on the property, and the statute of limitations has since expired, thus expunging the senior mortgage. The district court originally disagreed and denied the junior mortgagor’s motion for summary judgment. But two days later, FAPA was enacted and, upon reconsideration, the district court reversed itself, applied FAPA retroactively, and expunged the senior mortgage. The senior mortgagor appealed to the Second Circuit Court of Appeals, arguing that FAPA’s retroactive application violates both the New York Constitution and U.S. Constitution. The federal appellate court concluded that the state law questions presented by the senior mortgagor were essential to deciding the appeal. It certified two questions to the New York Court of Appeals:
1. Whether, or to what extent does, Section 7 of the Foreclosure Abuse Prevention Act, codified at N.Y. C.P.L.R. § 213(4)(b), apply to foreclosure actions commenced before the statute’s enactment?
2. Whether FAPA’s retroactive application violates the right to substantive and procedural due process under the New York Constitution, N.Y. Const., art. I, § 6?

Unlike previous FAPA-related questions from the Second Circuit that the New York Court of Appeals declined to answer, the Court of Appeals agreed to answer the questions certified in Article 13 LLC.
The stage is now set for the first rulings from the New York Court of Appeals on retroactive application of FAPA. That said, while the New York Court of Appeals will have the final say on the interpretation of FAPA and its compliance with the New York Constitution, the Second Circuit Court of Appeals remains free to conclude that FAPA’s retroactive application violates the U.S. Constitution.
The outcome of these cases will have a significant impact on foreclosure litigation and mortgage servicing operations in New York. We will continue to monitor FAPA litigation in New York and provide updates as soon as the Court of Appeals issues a ruling.
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Puerto Rico High Court Confirms Employers Need to Check NLRA Preemption of Local Employment Law Claims

Takeaways

Puerto Rico courts lack jurisdiction over claims involving conduct “arguably” protected or prohibited by the NLRA, even if framed under local laws.
The NLRB has exclusive authority to adjudicate unfair labor practice claims covered by the NLRA — state or local courts must defer unless the NLRB declines jurisdiction.
Employers facing claims related to union activity or retaliation should evaluate NLRA preemption early and coordinate with labor counsel to assert defenses or direct claims to the NLRB.

Senator Tillis Introduced a Bill Taxing Proceeds of Litigation Financing Agreements

Senator Thom Tillis introduced a bill (called the “Tackling Predatory Litigation Funding Act”) that would impose additional significant taxes on litigation funding investments. Rep. Kevin Hern (R-OH) introduced a similar bill in the House of Representatives. The bill would apply to taxable years beginning after December 31, 2025, which could include future payments related to existing arrangements.
The following is a summary discussing the key points of such proposed legislation.

General Rule: A tax equal to the highest individual rate plus 3.8% (37% + 3.8%, or 40.8% under current law) would be imposed on any qualified litigation proceeds received by a covered party.
Covered Party: A covered party for these purposes includes any third party to a civil action which receives funds pursuant to a litigation financing agreement and is not an attorney representing a party to such civil action. If the covered party is a partnership, S-corporation or other pass-thru entity, the tax would be imposed at the entity level. If a U.S. corporation is a covered party receiving qualified litigation proceeds, it would be subject to a 40.8% in lieu of the normal 21% tax. The tax also applies to tax-exempt U.S. investors and non-U.S. investors, including investors described in section 892 of the U.S. Internal Revenue Code. The tax apparently applies even if the non-U.S. investor has no connection to the United States, although we are unsure whether this was intended. There is no apparent “treaty override” so investors that benefit from a tax treaty with the United States may be able to rely on the treaty.
Qualified Litigation Proceeds: Qualified litigation proceeds mean, with respect to any taxable year, an amount equal to the realized gains, net income or other profit received by a covered party during the taxable year which is derived from, or pursuant to, any litigation financing arrangement. These gains, income or profit are not reduced by any ordinary or capital losses, which could include losses from another litigation funding investment. This definition is not limited to U.S. source litigation proceeds, so it could include proceeds from non-U.S. litigation funding investments.
Litigation Financing Agreement: A litigation financing agreement is with respect to any civil action, administrative proceeding, claim or cause of action (collectively, a “civil action”), a written agreement (A) (1) where a third party agrees to provide funds to one of the named parties or a law firm affiliated with the civil action and (2) which creates a direct or collaterized interest in the proceeds of such civil action which is based, in whole or part, on a funding-based obligation to the civil action, the appearing counsel, any contractual co-counsel or the law firm of such counsel or co-counsel and (B) that is executed with any attorney representing a party of such civil action, any co-counsel in the litigation with a contingent fee interest in the representation, any third party that has a collateral based interest in the contingency fees of the counsel or co-counsel which is related to the fees derived from representing such party or any named party in the civil action. This term can also include any agreement which, as determined by the Secretary of the Treasury, is substantially similar. We believe this definition will apply to virtually all litigation funding agreements regardless of the form of the agreement (e.g., loan, option, forward, swap etc.). For purposes of these rules, the term “civil action” may include more than one civil action.
Exceptions: Litigation funding agreement does not include: (1) any agreement under which the total amount of funds provided with respect to an individual civil action is less than $10,000, (2) any agreement under which the third party providing funds has a right to receive proceeds from the agreement that are limited to (x) repayment of principal on a loan, (y) repayment of principal plus interest as long as the interest does not exceed the greater of 7% or a rate equal to twice the average annual yield on a 30 year U.S. Treasury security or (z) reimbursement of attorney’s fees, or (3) the third party providing the funding bears a relationship as described in section 267(b) to the named party (e.g. generally includes two corporations that are members of the same controlled group or two entities that have 50% ownership overlap). We believe that these exceptions will be of only very limited use.
Withholding: The parties having control, receipt or custody of the proceeds from a civil action with respect to which such person has entered into a litigation financing agreement must withhold from such proceeds a tax equal to 50% of the applicable percentage (which would be a withholding rate of 20.4% under current law) of any payments which are required to be paid under such agreement. This withholding amount is based on any payments required to be made, which could result in over-withholding because the withheld amount is not reduced by the original amount funded. This withholding obligation appears to apply to any party in the world, even if the party has no connection to the U.S. and is making a payment to another non-U.S. person in respect of litigation that is outside of the United States. We do not know whether this extraordinarily broad scope was intended.

COOKIE CUTTER SOLUTION? Senate Bill 690’s “Commercial Business Purpose Exemption” Could Crumble CIPA Lawsuits!

California Senate Bill 690 (“SB 690”) aims to amend CIPA by creating a broad exemption for the use of online tracking technologies if employed for a “commercial business purpose.” This means that companies could deploy cookies, pixels, chatbots, and session replay software to collect and analyze user data – even if it captures personal communications – without facing CIPA lawsuits.
As all of you CIPAWorld dwellers know, in recent years, CIPA has become one of the most aggressively litigated privacy laws in the nation, especially since the infamous CIPA / TCPA catastrophe. Since Javier’s massive expansion of CIPA, thousands of high-profile lawsuits and arbitration demands have been filed against companies allegedly surreptitiously intercepting or “wiretapping” consumer communications through technologies such as session replay software, chatbots, cookies, and pixel trackers – tools that assist legitimate businesses to capture keystrokes, chat transcripts, and browsing behaviors to better a consumer’s journey on its website (or you know even comply with the Telephone Consumer Protection Act). And along with CIPA’s $5,000 PER violation private right of action, it’s no surprise Plaintiff’s attorneys have been filing lawsuits en masse.
But perhaps not for much longer.
SB 690 was introduced by Democratic Senator Anna Caballero, and is rapidly emerging as the most important and controversial privacy legislation of 2025 as it makes it way through the state legislature. SB 690 proposes to amend the heavily litigated CIPA by carving out an exemption for the use of tracking technologies – including cookies, pixels chatbots, and session replay tools – when deployed for a legitimate “commercial business purpose.”
Specifically, SB 690:

Exempts a commercial business purpose from the general prohibition against eavesdropping or recording a confidential communication.
Specifies that the civil action, as authorized under current law for a person who has been injured by a violation of CIPA, does not apply to the processing of personal information for a commercial business purpose.
Specifies that a trap and trace device does not include a device or process that is used in a manner consistent with a commercial business purpose.
Specifies that a pen register does not include a device or process used in a manner consistent with a commercial business purpose.
Defines a “commercial business purpose” to mean the processing of personal information either performed to further a business purpose or subject to a consumer’s opt-out rights.
Makes its provisions retroactive and applicable to any case pending as of January 1, 2026. (Notably, when the bill was first introduced, the proposed exemption was explicitly retroactive and would have applied to any legal action pending as of January 1, 2026. This crucial provision would have impacted hundreds of active lawsuits currently making their way through California courts and tribunals, with plaintiffs in those cases seeing their claims effectively neutralized. However, this retroactivity drew sharp criticism from privacy advocates and plaintiffs’ attorneys, who argued that it amounts to a giveaway to corporate defendants and could deprive consumers of remedies for past privacy violations. Following a third reading of the Bill on May 29, 2025, the Senate removed the retroactive provision and ordered the amended bill to a second reading.)

The “commercial business purpose” phrase is defined in alignment with the California Consumer Privacy Act (“CCPA”) to harmonize CIPA with existing state data privacy standards. A “commercial purpose” is defined as the processing of personal information either performed to further a business purpose or subject to a consumer’s opt-out rights. SB 690 also proposes excluding any device that is used in a manner that is “consistent with a commercial business purpose” from the definitions of a pen register and trap and trace device. If passed, the use of online tracking technologies – that are currently under scrutiny – would likely fall under the “commercial purpose” exemption.
Proponents of the bill have argued that the CCPA already regulates how businesses collect, use, and share consumers data (including for website analytics and advertising) and creates opt-out rights, making additional protections under CIPA superfluous and unduly burdensome. If a business uses tracking tools in a manner consistent with the CCPA’s requirements then, under SB 690, they would not be considered in violation of CIPA.
“[SB 690] stops the abusive lawsuits against California businesses and nonprofits under the California Invasion of Privacy Act (CIPA) for standard online business activities that are already regulated by the California Consumer Privacy Act (CCPA).”
– Senator Caballero in a Press Release introducing the bill.

Supporters of the bill note that CIPA’s private right of action is being abused far beyond its original purpose when the law was enacted in 1967:
“Beyond regulatory inconsistency, the unchecked barrage of CIPA lawsuits has done nothing to protect consumer privacy. Instead, these demand letters and lawsuits have created significant costs for California businesses, particularly small and mid-sized businesses – and non-profits – that lack the resources to defend against these claims. Trial lawyers have targeted businesses for using common digital tools such as chatbots—tools that are widely used to enhance user experience and do not constitute unlawful wiretapping or eavesdropping as originally intended under CIPA.
Trial lawyers have sued over 1,500 businesses since 2022, and have sent thousands more demand letters.”

While those in opposition – including of course the NCLC – argue that legislative history makes it clear they were concerned about the future of surveillance and wanting lasting privacy protections for Californians:
“When passed in 1967, CIPA was designed as a forward-looking protection against the full spectrum of technological intrusions into private life. The legislative history demonstrates a clear intention to address and regulate the growing threat of electronic surveillance. These concerns are consistent with the now ubiquitous and invasive commercial practices of internet-based tracking, profiling, and data commodification. CIPA was intended to be robust, technology-neutral, and protective of Californians’ right to control their private communications, regardless of the surveillance medium. The argument advanced by SB 690—that CIPA was intended to be limited to traditional wiretaps—is contradicted by the legislative record, which reveals a sophisticated understanding of, and alarm at, the ever increasing sophistication of private surveillance systems that propelled their vision past the 1960s and into the future.”

Opponents of the bill also argue that the CCPA was never meant to replace privacy laws like the CIPA and that the CCPA works on an opt-out basis but doesn’t let consumers file private lawsuits for most privacy violations – only for data breaches. CIPA, on the other hand, gives consumers the right to take business to court when their “conversations” are being “intercepted” or “recorded” without consent. The bill would take away privacy protections and give tech companies and businesses the right to secretly monitor and record conversations between consumers and business in real time – by claiming to act for a “commercial purpose,” they argue.
SB 690 is now advancing toward a full Senate vote and must be passed out of the California Senate this week – by June 6, 2025, to remain viable this session. Interestingly, it has received unanimous bipartisan support in Senate votes until now.
This could really be a big win for business using everyday common website tools – many tools that are just normal parts of running a website or improving customer experience and were not intended to be covered by a statute that was enacted back in 1967. SB 690 could drastically reduce CIPA risk for companies – and even potentially shape precedent for other states that have similar privacy statutes as California.

Historic Shift: Puerto Rico’s Supreme Court Explicitly Adopts Loper Bright, Ending Judicial Deference to Agencies’ Legal Conclusions

PR courts now independently evaluate agencies’ legal conclusions under LPAU, following the SC’s Loper Bright adoption.
A landmark decision reshaping judicial review of agency interpretations
Recently, the Supreme Court of Puerto Rico issued a landmark decision in the case Vázquez et al. v. Consejo de Titulares y Junta de Directores del Condominio Los Corales, 2025 TSPR 56, issued on May 21, 2025. In this ruling, the Court explicitly adopted the reasoning from the recent United States Supreme Court decision, Loper Bright Enterprises v. Raimondo, 144 S.Ct. 2244, 219 L.Ed.2d 832 (2024), to end the longstanding doctrine of judicial deference towards administrative agencies’ legal conclusions in Puerto Rico.
Historical context: The Traditional Doctrine of Judicial Deference
Historically, Puerto Rico’s Supreme Court consistently held that appellate judicial review of administrative decisions required deference to agencies’ legal conclusions. As previously established, administrative agencies’ decisions enjoyed a presumption of legality and correctness. Capó Cruz v. Jta. Planificación et al., 204 DPR 581, 591 (2020); García Reyes v. Cruz Auto Corp., 173 DPR 870, 893 (2008). The judicial deference was based upon the specialized knowledge and expertise agencies possessed regarding matters within their delegated authority. Pérez López v. Dpto. Corrección, 208 DPR 656, 673-674 (2022); Super Asphalt v. AFI y otros, 206 DPR 803, 819 (2021).
Under this framework, even when courts disagreed with an agency’s interpretation, judicial review was limited to determining if the agency’s determination was arbitrary, illegal, or unreasonable. Torres Rivera v. Policía de PR, 196 DPR 606, 628 (2016). Absent clear evidence of arbitrariness or unreasonableness in the agency’s determination, “the reviewing court could not substitute its own judgment for the specialized judgment of the administrative agency”. Perfect Cleaning v. Centro Cardiovascular, 172 DPR 139 (2007).
The Decisive Case: Vázquez et al. v. Consejo de Titulares y Junta de Directores del Condominio Los Corales, supra.
In Vazquez v. Condominio Los Corales, supra, the Puerto Rico Supreme Court confronted a scenario where the Department of Consumer Affairs (DACO), in a blatant abuse of discretion, issued a legal interpretation explicitly contradicting an established Supreme Court precedent in Colón Ortiz v. Asociación de Condómines B.T.I, 185 DPR 946 (2012). In Colon Ortiz, the Supreme Court had clearly determined that a condominium Administrator was an “agent” or legal representative. Nevertheless, DACO disregarded this binding Supreme Court precedent and classified the Administrator as a “contractor”, unjustifiably invoking their administrative “expertise”.
In addressing this misinterpretation, the Supreme Court carefully reviewed not only its prior jurisprudence but also examined the evolution of Puerto Rico’s administrative law statutes, particularly the shift from the former legislative framework to the current Uniform Administrative Procedure Act, Act. No. 38-2017. (LPAU).
Under the former legal regime, specifically the repealed Act. No. 170 of August 12, 1988, “Uniform Administrative Procedure Act of the Commonwealth of Puerto Rico” and its amendment by the also repealed Act No. 210 of December 8, 2016, “Administrative Law Reform Act”, administrative agencies’ legal interpretations explicitly merited judicial deference. Both laws mandated that legal conclusions by agencies were entitled to a presumption of correctness, emphasizing agency specialization and strictly limiting judicial substitution of judgment to instances of arbitrariness, illegality, or unreasonableness.
However, the Supreme Court highlighted that the legislative language underwent a fundamental transformation with the adoption of the current LPAU Act. No. 39-2017, explicitly removing the prior deferential language and stating clearly in Section 4.5 that “legal conclusions shall be reviewable in all aspects by the court”. In its Opinion, the Supreme Court interpreted this deliberate legislative shift and emphasized that the elimination of deferential language underscored the Legislature’s intent to abandon the judicial deference toward agencies’ legal conclusions or interpretations.
Adoption of the Loper Bright Doctrine
In this same decision, the Supreme Court of Puerto Rico clearly embraced the reasoning of the recent landmark decision from the United States Court, Loper Bright Enterprises v. Raimondo, supra, which overturned the longstanding Chevron doctrine. Chevron had required federal courts to defer to agencies’ reasonable interpretations of ambiguous statutes.
According to our Supreme Court’s analysis, the Loper Bright decision emphasized that statutory interpretation inherently belongs to the judiciary rather than administrative agencies. Finding the federal court’s reasoning highly persuasive, especially considering that Puerto Rico’s current LPAU closely mirrors the U.S. federal Administrative Procedure Act (APA), Puerto Rico’s Supreme Court reiterated that, while administrative interpretations may constitute informed perspectives that may guide the court, such interpretations no longer bind judicial determination. In doing so, the Supreme Court categorically underscored the shift toward judicial independence, explicitly adopting the federal position articulated in Loper Bright:
As resolved by the highest federal court, courts must exercise independent judgment when determining whether an agency has acted within the scope of its statutory authority. More importantly, contrary to the practice of recent decades, courts are no longer required to defer to an agency’s interpretation of law merely because the statute is ambiguous.

This adoption of the Loper Bright doctrine affirms a new judicial autonomy in interpreting statutory provisions, definitively ending the automatic judicial deference previously granted to administrative agencies’ legal conclusions.
Importantly, the Supreme Court of Puerto Rico emphasized that this doctrinal shift specifically applies only to agencies’ legal conclusions, leaving unchanged the longstanding judicial approach toward factual determinations. Under Section 4.5 of LPAU, factual determinations made by agencies continue to be upheld by courts if supported by substantial evidence contained in the administrative record. Consequently, while courts will now exercise full independent review of legal interpretations, they will still defer to agencies’ factual determinations provided those conclusions meet the established evidentiary standard.
Practical Impact of this Doctrinal Change
This doctrinal shift significantly enhances the judiciary’s role by empowering courts to fully and independently evaluate agencies’ legal interpretations without automatic deference, thus ensuring greater accuracy in the application of the law. As a result, administrative agencies will now be compelled to justify their legal conclusions with rigorous and sound reasoning, promoting increasing accountability and transparency in their decision-making processes.
Furthermore, this enhanced judicial oversight provides business and citizens with greater legal certainty, stability, and predictability, as judicial independence promotes more consistent and uniform interpretations of statutory provisions. Ultimately, this doctrinal change reinforces judicial independence as the ultimate interpreter of statutory law, thereby solidifying Puerto Rico’s fundamental separation of power principles.
Conclusion
The recent Supreme Court decision represents a doctrinal shift, explicitly adopting the U.S. Supreme Court’s Loper Bright Enterprises v. Raimondo, supra, reasoning and incorporating a thorough legislative analysis into its judicial reasoning. This decision ends automatic judicial deference exclusively toward administrative agencies’ legal conclusions, while maintaining the traditional deference to agencies’ factual determinations based on substantial evidence.

Course Correction: Supreme Court Steers Toward Greater Predictability in NEPA Reviews

On 29 May 2025, the Supreme Court unanimously declared that a “course correction” was needed for cases under the National Environmental Policy Act (NEPA), holding that a law originally meant to be a procedural check to inform agency decision making has instead grown to paralyze it. Seven County Infrastructure Coalition v. Eagle County reversed a D.C. Circuit ruling that an agency had not done enough in its environmental impact statement (EIS) to review the potential upstream and downstream effects of a proposed railroad line. The Court roundly rejected judicial nitpicking of agency environmental reviews. The Court concluded that agencies are the factual experts when making determinations about environmental impacts, and therefore, should be afforded substantial deference by reviewing courts. Seeking to further streamline the process, the Court signaled that future NEPA actions should be narrower in scope, more concise, and take less time. This change in course will likely result in greater predictability for agencies and developers about the adequacy of NEPA reviews.
NEPA Is Not Meant to Be a “Substantive Roadblock”
When the federal government approves the development of an infrastructure project, NEPA obligates the relevant agency to complete an environmental review, such as an EIS, to identify significant environmental effects of the project and feasible alternatives to mitigate those effects. The purpose of a NEPA review is to inform agencies and the public about possible environmental consequences of a federal decision. In Seven County, the Court reinforced the principle that NEPA is a procedural cross-check, not a substantive roadblock, intended to inform agency decision making, not to paralyze it.
In 2020, the Seven County Infrastructure Coalition applied to the US Surface Transportation Board (the Board) for approval of an 88-mile railroad line connecting an oil-rich area of Utah to the national freight rail network to allow transportation of crude oil to refineries along the Gulf Coast. As part of its NEPA review, the Board prepared a 3,600-page EIS that noted—but did not fully analyze—the environmental effects of foreseeable increases in upstream oil drilling in Utah and downstream refining of crude oil in the Gulf. The Board approved the railroad line, but the adequacy of its NEPA review was challenged by a county and several environmental groups. The D.C. Circuit agreed with those challengers, finding that the Board should have more extensively considered the indirect upstream and downstream effects in its EIS and vacating the Board’s approval of the railroad line.
In an 8-0 decision, the Court reversed. Justice Brett Kavanaugh, writing for five of the justices, seized the opportunity to recalibrate expectations around NEPA review, explaining that NEPA requires a process for an agency’s environmental review, but it does not dictate the ultimate outcome. There are other “substantive” statutes (such as the Clean Air Act and Clean Water Act) that set emissions and effluent limitations and the like, but NEPA is not one of those statutes. Accordingly, the Court reemphasized that “review of an agency’s EIS is not the same thing as review of the agency’s final decision concerning the project.” And it stressed the need for deference to agency determinations at every level of the process—from assessing the significance of environmental effects, to considering feasible alternatives, to deciding what impacts to review.
As part of its level-setting endeavor, the Court pointed to the 2023 NEPA amendments that were part of the Building US Infrastructure through Limited Delays & Efficient Reviews Act (BUILDER Act), where Congress prohibited agencies’ EISs from “going on endlessly” and imposed 150-page limits and two-year deadlines for EISs.
An Agency’s NEPA Review Should Be Limited to the Project at Hand
As to the narrow question before it, the Court concluded that the Board did not have to consider upstream and downstream environmental effects that were “separate in time or place” from the railway project.
The Court noted that while indirect environmental effects of the project itself may fall within NEPA’s scope (even if they might extend outside the geographical territory of the project or materialize later in time), the fact that the project might foreseeably lead to the construction or increased use of a separate project does not mean the agency must consider that separate project’s environmental effects. In other words, “the separate project breaks the chain of proximate causation between the project at hand and the environmental effects of the separate project.” This is particularly true where those separate projects fall outside of the agency’s authority, as was the case for the Board, which did not have jurisdiction over upstream oil drilling or downstream oil refineries.
Justice Sonia Sotomayor, along with Justices Elena Kagan and Ketanji Brown Jackson, concurred in the judgment, noting that the majority opinion could have reached the same result without “unnecessarily grounding its analysis largely in matters of policy.” But they too agreed that the D.C. Circuit had gone too far in imposing NEPA duties on agencies.
Courts Must Afford Agencies “Substantial Deference” in NEPA Review
Emphasizing the limited role of judicial review in NEPA cases, the Court explained that judges should afford “substantial judicial deference” to agencies in NEPA cases. The Court contrasted its decision in Loper Bright Enterprises v. Raimondo,1 where no deference is owed to agencies’ legal determinations, with the highly factual issues that are at play in an EIS. These include whether a particular explanation in an EIS is detailed enough, the likely impacts of a project, whether those impacts are “significant,” and what alternatives are really feasible. Such choices should not be micromanaged by the courts, so long as they fall within the zone of reasonableness.
Key Takeaways
Going forward, project developers may expect to see:
Shorter and More Concise NEPA Reviews
Agencies, particularly prompted by various Administration priorities, may begin to conduct shorter NEPA reviews, consistent with Congress’ 2023 NEPA amendments.
Narrower Focus for EISs
Given the Court’s clear direction that judges should defer to the agencies’ decisions about where to draw the line when considering indirect environmental effects, some agencies may streamline the focus of their EISs.
Increased Deference by Courts to Agency NEPA Reviews
The “only role” for a court in an action regarding a deficient EIS is to confirm that the agency has addressed environmental consequences and feasible alternatives to the relevant project.
Fewer Agency Authorizations Being Vacated on the Basis of an Inadequate EIS
The Court stressed that the “ultimate question” under NEPA is not whether an EIS is inadequate in and of itself, but whether the agency’s final decision is “reasonable and reasonably explained.” Because an EIS is only one component of that analysis, a deficient EIS will not automatically require vacatur of the project’s approval.
Looking Ahead
The Court has now joined the chorus of criticisms directed at interminable NEPA reviews, with all three branches of government in alignment that the old mode of NEPA must go. Although Congress already sought to streamline the EIS process through the BUILDER Act, given the lag between agency processes and judicial review, the lower courts have yet to internalize what it may mean to review a 150-page EIS conducted in less than two years. This decision also comes at a time when the Administration is seeking to accelerate permitting procedures for domestic energy projects and retooling its NEPA regulations.2 Given these shifts, the rigor of judicial scrutiny of such EISs may need to be adjusted. Seven County gives lower courts the leeway they need to make that shift—indeed, it seems to demand it.

Footnotes

1 603 U.S. 369 (2024).
2 See Press Release, U.S. Dep’t of the Interior, Department of the Interior Implements Emergency Permitting Procedures to Strengthen Domestic Energy Supply (Apr. 23, 2025), https://www.doi.gov/pressreleases/department-interior-implements-emergency-permitting-procedures-strengthen-domestic.