Richard Manfredi, Author at Gibson Dunn

From the Derivatives Practice Group: This week, the CFTC was especially active, issuing several no-action letters, including to designated contract markets and derivatives clearing organizations regarding event contracts and in response to a request from ISDA regarding Part 43 and Part 45 requirements.

New Developments

Acting Chairman Pham Announces Implementation of U.S. Treasury Market Reforms. On December 12, CFTC Acting Chaiman Pham announced the CFTC had approved a proposed order to grant a limited exemption necessary for the Chicago Mercantile Exchange Inc. and the Fixed Income Clearing Corporation to make their existing cross-margining arrangement available to certain customers with appropriate safeguards. [NEW]

U.S. Senate Passes Procedural Vote for Mike Selig, Paving the Way for a Final Vote in the Senate. On December 11, the Senate voted 52-47 to approve a resolution that sets up the final vote for Mike Selig’s confirmation as CFTC Chairman. [NEW]

CFTC Staff Issues No-Action Letters Regarding Event Contracts. On December 11, the CFTC’s Division of Market Oversight and Division of Clearing and Risk announced they have taken a no-action position regarding swap data reporting and recordkeeping regulations in response to requests from multiple registered entities, including designated contract markets and derivatives clearing organizations. According to the announcement, the Divisions will not recommend the CFTC initiate an enforcement action against certain registered entities or their participants for failure to comply with certain swap-related recordkeeping requirements and for failure to report to swap data repositories data associated with binary option transactions executed on or subject to the rules of the registered entities, subject to the terms of the no-action letters. [NEW]

CFTC Staff Issues No-Action Position Relating to Designated Contract Market Procedures. On December 11, the CFTC’s Division of Market Oversight announced it has issued a no-action letter to Small Exchange Inc., a designated contract market, which addresses certain procedures related to dormancy. The no-action position is time-limited and subject to the terms and conditions in the Division’s no-action letter. [NEW]

Acting Chairman Pham Announces Withdrawal of “Outdated” Digital Assets Guidance. On December 11, CFTC Acting Chairman Pham announced that the CFTC will withdraw “outdated” guidance related to actual delivery of “virtual currencies,” given the substantial developments in crypto asset markets. The CFTC said that the withdrawal of the guidance will enable the CFTC to continue its ongoing work to implement the recommendations in the President’s Working Group on Digital Asset Markets report. [NEW]

CFTC Staff Issues No-Action Letter Regarding Part 43 and Part 45 Requirements. On December 11, the CFTC’s Division of Market Oversight took a no-action position in response to a request from the International Swaps and Derivatives Association regarding certain data requirements under Part 43 and Part 45 of the CFTC’s regulations to reduce unnecessary and excessive regulatory burden and associated costs. [NEW]

Acting Chairman Pham Announces CEO Innovation Council Participants. On December 10, CFTC Acting Chairman Pham announced the first round of CEO Innovation Council participants, representing exchanges. The CFTC said that the CEO Innovation Council will engage in public discussion of market structure developments in derivatives markets and that further information on the CEO Innovation Council will be released once details are finalized. [NEW]

Acting Chairman Pham Announces Regulatory Clarity for U.S. Access to Markets. On December 9, CFTC Acting Chairman Pham announced that the CFTC’s Market Participants Division, Division of Clearing and Risk, and Division of Market Oversight issued a no-action letter to harmonize three separate definitions of “U.S. person,” among other things, under the CFTC’s Dodd-Frank Act cross-border swap framework. According to the CFTC, the letter simplified and consolidated existing no-action positions that address almost 15 years of regulatory uncertainty and promotes harmonization with SEC regulations. [NEW]

CFTC to Accelerate Publication of Backlogged COT Data. On December 9, the CFTC announced that it is accelerating the publication of Commitments of Traders reports that were interrupted during the lapse in federal appropriation. According to the CFTC, the revised timeline will eliminate the report backlog by December 29, 2025. [NEW]

Acting Chairman Pham Announces Launch of Digital Assets Pilot Program for Tokenized Collateral in Derivatives Markets. On December 8, CFTC Chairman Pham announced the launch of a digital assets pilot program for certain digital assets, including BTC, ETH, and USDC, to be used as collateral in derivatives markets; guidance on tokenized collateral; and withdrawal of outdated requirements given the enactment of the GENIUS Act. The CFTC said that the announcement follows the tokenized collateral initiative Acting Chairman Pham launched in September as a part of the CFTC’s Crypto Sprint to implement recommendations in the President’s Working Group on Digital Asset Markets report. [NEW]

Acting Chairman Pham Announces First-Ever Listed Spot Crypto Trading on U.S. Regulated Exchanges. On December 4, Chairman Caroline D. Pham announced that listed spot cryptocurrency products will begin trading for the first time in U.S. federally regulated markets on CFTC registered futures exchanges. This announcement follows recommendations by the President’s Working Group on Digital Asset Markets and stakeholder insights from the CFTC’s Crypto Sprint and cooperative engagement with the Securities and Exchange Commission. The Crypto Sprint also launched public consultations on all other recommendations from the President’s Working Group report relevant to the CFTC.

Acting Chairman Pham Announces Reforms to Wells Process, and Amendments to the Rules of Practice and the Rules Relating to Investigations. On December 1, Chairman Caroline D. Pham announced the Commission is amending its Rules of Practice and its Rules Relating to Investigations. The amended Rules of Practice seek to enhance the transparency of the Commission’s enforcement actions, including changes to ensure an accurate and complete administrative record by improving internal memoranda to the Commission when the Division of Enforcement recommends an enforcement action.

New Developments Outside the U.S.

ESMA Appoints Marie-Anne Barbat-Layani and Christopher P. Buttigieg as the New Members of its Management Board and Renews Armi Taipale’s Mandate. On December 11, ESMA appointed Marie-Anne Barbat-Layani of Autorité Des Marchés Financiers (France) and Christopher P. Buttigieg of Financial Services Authority (Malta), as the new members of its Management Board. The Board of Supervisors has reappointed Armi Taipale of Finanssivalvonta (Finland), for a second mandate. [NEW]

ESMA Chair Verena Ross to Step Down at the End of Her Current Term. On December 10, ESMA announced that its Chair, Verena Ross, has decided to not renew her term as Chair for a second mandate. According to ESMA, she will continue her work as ESMA’s Chair until the end of her contract on October 31, 2026. ESMA said that it will now launch the process for selecting a new Chair. [NEW]

ESMA Announces Supervisory Expectations for the Management Body in the Form of 12 High Level Principles. On December 10, ESMA published its Final Report on the Supervisory Expectations for the Management Body, outlining ESMA’s expectations for the management bodies of the entities under its supervision. ESMA said that the 12 high-level principles are directed at entities supervised by ESMA and those looking to obtain an ESMA license, and are designed to set out ESMA’s core expectations in the form of outcomes. [NEW]

ESMA Welcomes Commission’s Ambitious Proposal on Market Integration. On December 4, ESMA announced that it welcomes the European Commission’s legislative proposal on market integration and supervision. According to ESMA, the package represents a major step towards deeper and more efficient EU capital markets and reflects many of the recommendations set out in ESMA’s 2024 Position Paper on building more effective and attractive capital markets in the EU.

ESMA to Launch Common Supervisory Action on MiFID II Conflicts of Interest Requirements. On December 2, ESMA announced that it will launch a Common Supervisory Action (CSA) with National Competent Authorities on conflicts of interest in the distribution of financial instruments. The CSA will assess how firms comply with their obligations under MiFID II to identify, prevent, and manage conflicts of interest when offering investment products to retail clients.

New Industry-Led Developments

Global Standard-Setting Bodies Publish Assessment of Margin Requirements for Non-Centrally Cleared Derivatives. On December 12, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) published a report that reviews the implementation of margin requirements for non-centrally cleared derivatives. IOSCO said the report concluded that the framework has been effectively implemented and finds no evidence of material issues. The BCBS-IOSCO Working Group on Margining Requirements recommended ongoing monitoring through supervisory information exchange and the sharing of experiences among member authorities. [NEW]

ISDA Responds to Bank of England on Gilt Market Resilience. On December 5, ISDA responded to the Bank of England’s discussion paper on gilt market resilience. In the response, ISDA encourages the Bank of England, before introducing any significant policy changes that would affect the functioning of the gilt repo market, to consider the prudential requirements on capital and liquidity in relation to repo transactions, in conjunction with monetary policy and financial stability, to avoid unintended and detrimental consequences for the UK gilt market and firms’ risk management practices.

ISDA Publishes Note on Determining Initial Reference Index for New Trades referencing CPI-U. On November 25, ISDA published a Market Practice Note to recommend a specific methodology that market participants could elect to use for the purposes of determining the Initial Reference Index for certain new inflation derivative transactions given that the Bureau of Labor Statistics has confirmed it will not publish the October 2025 level of the “USA – Non-revised index of Consumer Prices for All Urban Consumers (CPI-U)” as defined in the 2008 ISDA Inflation Derivatives Definitions.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, Karin Thrasher, and Alice Wang*.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Derivatives practice group, or the following practice leaders and authors:

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

*Alice Wang, a law clerk in the firm’s Washington, D.C. office, is not admitted to practice law.

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

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Europe

11/19/2025

European Commission | Legislative Package | Digital Omnibus and European Business Wallet

The European Commission has proposed simpler digital rules and new business wallets to cut costs and boost innovation.

The European Commission unveiled a digital omnibus to simplify EU rules on AI, cybersecurity and data, alongside a Data Union Strategy and European Business Wallets that will offer companies a single digital identity to simplify paperwork and make it easier to do business across EU. The initiative aims to streamline compliance, reduce administrative costs by €5 billion, and unlock €150 billion in annual business savings by 2029.

For more information: The European Commission website

11/19/2025

European Commission | Draft Recommendation | Model and Standard Contractual Clauses Under the Data Act

The European Commission publishes draft model terms and clauses to simplify data sharing and cloud contracts.

The European Commission released draft non-binding Model Contractual Terms for data access and use and Standard Contractual Clauses for cloud computing contracts. These templates aim to help businesses, especially small and medium-sized enterprises, implement the Data Act, ensuring fairness, legal certainty, and easier cloud switching.

For more information: The European Commission website

11/17/2025

Council of the European Union | Regulation | Cross-border GDPR Enforcement Procedures

The Council adopts new EU law to speed up handling of cross border GDPR complaints.

The Council adopted a regulation harmonizing procedures for cross-border data protection cases. The law establishes uniform admissibility criteria, defines rights for complainants and investigated parties, introduces a simple cooperation procedure, and sets investigation deadlines of 15 months for standard cases and 12 months for simpler ones.

For more information: The Council of the European Union website

11/13/2025

Court of Justice of the European Union (“CJEU”) | Judgment | e-Privacy Directive

The CJEU clarifies that where the exception provided under Article 13(2) of the e-Privacy Directive applies, no separate legal basis under the GDPR is required.

The Court held that email addresses collected when users create a free account to access limited content and a free daily newsletter can be considered as obtained “in the context of the sale of a … service”, even if it is free. The sending of the newsletter was considered as a use of an email for the purposes of direct marketing for similar services within the meaning of Article 13(2) of the e-Privacy Directive. The Court also ruled that when Article 13(2) applies, the conditions for lawful processing under Article 6 of the GDPR are not applicable.

For more information : CJEU judgment

10/30/2025

European Parliament | Study | Interplay between the AI Act and the EU Digital Legislation

The European Parliament has released a study examining the interaction between the AI Act and the broader EU digital regulatory framework.

The study highlights overlapping obligations between the AI Act and other key EU digital laws, including the GDPR, the Data Act, the Cyber Resilience Act, the Digital Services Act, the Digital Markets Act, and the NIS2 Directive. To address resulting challenges, it sets out recommendations ranging from short-term measures (promoting joint guidance and coordinated enforcement) to long-term actions (review of the EU’s digital regulatory landscape aimed at consolidation, simplification, and greater coherence).

For more information: European Parliament Website

10/20/2025

European Data Protection Board | Opinion | UK Adequacy Decisions

The European Data Protection Board (“EDPB”) adopted two opinions on the European Commission’s draft decisions extending the UK adequacy decisions under the GDPR and Law Enforcement Directive until December 2031.

With respect to the GDPR adequacy decision, the EDPB welcomes continued alignment but recommends further analysis of several issues, including amendments introduced by the Retained EU Law (Revocation and Reform) Act 2023, the Secretary of State’s new powers to modify the UK data protection framework, and rules governing transfers from the UK to third countries.

For more information: EDPB Website

10/14/2025

European Data Protection Board | Coordinated Enforcement Framework | Transparency

For its fifth coordination enforcement action, the European Data Protection Board (EDPB) will focus on transparency and information obligations under the GDPR.

National supervisory authorities will participate on a voluntary basis, conducting investigations at the national level. The findings from these actions will be aggregated and analyzed by the EDPB to gain deeper insights.

For more information: EDPB Website

10/09/2025

European Data Protection Board & European Commission | Guidelines | DMA & GDPR

The European Data Protection Board (“EDPB”) and the European Commission have published joint guidelines on the interplay between the Digital Markets Act (“DMA”) and GDPR.

The guidelines address DMA requirements that overlap with GDPR obligations, aiming to provide clarity and promote consistent interpretation across both frameworks. A public consultation is open until 4 December 2025.

For more information: EDPB Website

10/01/2025

General Court | Judgment | Unlawful Personal Data Processing

The General Court of the European Union (GCEU) has ordered the European Commission to pay €50,000 in compensation for non-material damages caused by a European Anti‑Fraud Office (“OLAF”) press release.

The claimant sought damages after OLAF published a press release that disclosed her personal data and allowed readers to identify her. The GCEU held that the press release unlawfully processed personal data, breached the presumption of innocence, and lacked neutrality, resulting in reputational harm, damage to professional career and mental distress.

For more information: European Union Website

France

10/15/2025

French Supervisory Authority | Paper | Postmortem Data

The French Supervisory Authority (“CNIL”) has published its report “Our Data After Us,” examining the challenges of managing postmortem data in a digital world.

The paper explores issues related to account management, data transmission, and the emergence of chatbots based on the data of deceased individuals. It highlights legal and ethical issues surrounding digital death and recommends raising public awareness, clarifying rights, and regulating AI applications involving postmortem data.

For more information: CNIL Website [FR]

10/14/2025

French Supervisory Authority | Guidance | Right to Data Portability

The French Supervisory Authority (“CNIL”) has published guidance on the application of the right to data portability in the context of loyalty programs.

Responding to requests from stakeholders in the distribution sector, the CNIL clarifies which information must be transmitted, focusing particularly on product barcodes and promotions associated with customers.

For more information: CNIL Website [FR]

10/13/2025

French Supervisory Authority | Sanction | Simplified Procedure

The French Supervisory Authority (“CNIL”) has announced issuing sixteen new sanctions under its simplified procedure since May 2025, totaling €108,000.

The sanctions relate to non-compliance with video surveillance rules, marketing without consent, and failure to cooperate with the CNIL.

For more information: CNIL Website [FR]

Germany

10/30/2025

Ministry for Digital and Civil Modernization (BMDS) | Draft Legislation | Data Act Implementation Law

The German Federal Cabinet has approved the draft legislation for the national implementation of the EU Data Act, aiming to establish a legal framework for data access and use in Germany.

The proposed Data Act Implementation Law (Data-Act-Durchführungsgesetz) outlines the responsibilities of the Federal Network Agency (Bundesnetzagentur) as the competent authority for enforcing the Data Act in Germany. It includes provisions on dispute resolution, supervisory powers, and sanctions. The draft also addresses the interplay between the Data Act and existing national regulations, particularly in the telecommunications and energy sectors. The law is still subject to parliamentary debate.

For more information: BMDS [DE]

10/28/2025

Data Protection Authority North Rhine-Westfalia (LDI NRW) | Enforcement Action | Sharing of Customer Data via Messenger Service

The LDI NRW has taken a firm stance against the practice of companies sharing personal data of customers through messenger services, deeming it a serious and ongoing violation of data protection law.

The LDI NRW has stopped a medical transport company from sharing client information including names, addresses and prescriptions in messenger groups. This information was intended to simplify the organization of patient transport. However, this does not justify the data processing that took place as the data was not necessary for the performance of a transport contract and should not have been made available to all members of the group chat, especially since health information is particularly sensitive and deserves special protection.

For more information: LDI NRW [DE]

10/28/2025

Hamburg and Austrian DPAs | Decisions | Credit Scoring as Automated Decision-Making

Automated credit scoring systems are facing increased scrutiny across Europe due to concerns over transparency, fairness, and compliance with the GDPR.

The Hamburg data protection authority imposed a substantial fine on a credit scoring provider for failing to adequately inform individuals about automated rejections and the logic behind the scoring process. Both cases underscore the importance of transparency, legal basis, and human oversight in automated credit assessments.

Meanwhile the Austrian data protection authority prohibited a scoring practice used by KSV1870, finding it incompatible with GDPR requirements. The case centered on the lack of transparency and the determinative impact of the score on contractual decisions, aligning with the CJEU’s SCHUFA ruling that such scoring may constitute automated decision-making under Article 22 GDPR.

For more information: Datenschutz-notizen [DE]

10/17/2025

Data Protection Conference (DSK) | Guideline | Data Protection in Generative AI Systems with RAG-methods

The DSK has issued guidance on data protection aspects specific to generative AI systems using the Retrieval-Augmented Generation (RAG) method.

RAG is a method that combines a language model with an external knowledge source — typically a database or document collection — so that the model retrieves relevant information and uses it to generate more accurate, context-specific responses. The guideline provides legal and technical advice on how to utilize the potential of such AI systems while minimizing the risks for those affected. Emphasis is placed on the requirements for transparency and purpose limitation. It concludes that RAG can improve compliance with GDPR principles such as data accuracy, integrity, and confidentiality, as it allows for better control, updating, and deletion of personal data. However, issues of transparency, purpose limitation, and data subject rights remain only partially resolved and must be evaluated on a case-by-case basis.

For more information: DSK [DE]

Norway

10/21/2025

Borgarting Court of Appeal | Sanction | Data Sharing Without Consent

Borgating Court of Appeal upholds €5.5 million fine against a dating app provider.

The Borgarting Court of Appeal dismissed dating app provider’s appeal and upheld the NOK 65 million (approximately €5.5 million) fine for unlawfully sharing users’ personal and special-category data with third-party advertisers without a valid consent. The ruling maintained earlier decisions issued by the Norwegian Supervisory Authority and the Privacy Appeals Board on all points.

For more information: Datatilsynet Website

10/01/2025

Norwegian Supervisory Authority | Consultation Response | EU AI Act

Norwegian Supervisory Auhtority (“Datatilsynet”) recommends full adoption of the EU AI Act with calls for stronger oversight and privacy safeguards

In its response to the Norwegian AI law consultation, the Datatilsynet backs full incorporation of the EU AI Act into national law to ensure equal citizen protections, while urging adequate resourcing, independence, expert complaint mechanisms, and litigation powers for market surveillance authorities. It also proposes a national ban on remote biometric identification and seeks clearer rules on jurisdiction, cross-border penalties, designated fundamental-rights authorities, and information sharing among regulators.

For more information: Datatilsynet Website [NO]

Finland

11/03/2025

Helsinki Administrative Court | Court Decision | GDPR Fine Overturned

The Finnish court overturns the €2.4 million GDPR fine imposed on the national postal and logistics operator.

The court annulled a fine against the national operator for creating digital mailboxes without user consent, holding that the processing was lawful under the GDPR because it was necessary for the performance of a contract – namely, the provision of digital postal services.

For more information: The Daily Finland website

Poland

10/16/2025

Polish Supreme Administrative Court | Judgment | Cookies & IP addresses

Polish Supreme Administrative Court (“NSA”) confirms that cookies and IP addresses are not automatically personal data.

In a case involving a web user-tracking tool, the NSA relied on the EU Court of Justice’s Breyer case law to emphasize that identifiability requires being able to distinguish one individual from another, not merely one device from another. As a result, there is no basis to treat IP addresses or cookie identifiers as personal data in all circumstances since their classification depends on whether, in the specific context, the data can be used to identify an individual.

United Kingdom

10/29/2025

UK Supervisory Authority | Fine | Unsolicited Marketing Messages

The UK Supervisory Authority (“ICO”) issued a £200,000 fine to a sole trader for sending nearly one million spam texts without valid consent.

The ICO found that the individual used data sourced from third parties without ensuring that data subjects’ consent had been obtained and without collecting their consent himself for the direct marketing. He also failed to identify himself or his business, instead concealing his identity by using hundreds of unregistered pre-paid SIM cards. The messages promoted debt solutions and energy saving schemes. 19,138 complaints were received via the spam reporting service in respect of these messages.

For more information: ICO Website

10/15/2025

UK Supervisory Authority | Fine | Cyber Attack

The UK Supervisory Authority (“ICO”) issued a fine of £14 million to two companies for failing to ensure the security of personal data following a cyber-attack in 2023.

Both entities belong to a business process outsourcing and professional services group. The attack began when a malicious file was downloaded onto an employee’s device. Despite a high-priority alert, the device was not quarantined for 58 hours, enabling malware deployment, privilege escalation, and lateral movement across the network. Nearly one terabyte of data was exfiltrated before ransomware was deployed, locking staff out of systems. The ICO considered that the companies failed to prevent privilege escalation and unauthorized lateral movement, to respond appropriately to security alerts, and to conduct adequate penetration testing and risk assessment.

For more information: ICO Website

09/26/2025

UK Government | Policy Announcement | Digital ID

The Prime Minister has announced plans to introduce a digital ID system for Right to Work checks.

The initiative aims to combat illegal employment while streamlining checks that currently rely on paper records. It will also simplify access to services such as driving licenses, childcare, and welfare. The digital ID will be free for UK citizens and legal residents and is expected to be integrated into a digital wallet. Public consultation will be launched later this year.

For more information: UK Government Website

The following Gibson Dunn lawyers prepared this update: Ahmed Baladi, Vera Lukic, Kai Gesing, Joel Harrison, Thomas Baculard, Ioana Burtea, Billur Cinar, Hermine Hubert, Christoph Jacob, Yannick Oberacker, Clemence Pugnet, and Phoebe Rowson-Stevens.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Privacy, Cybersecurity & Data Innovation practice group:

Privacy, Cybersecurity, and Data Innovation:

United States:
Abbey A. Barrera – San Francisco (+1 415.393.8262, abarrera@gibsondunn.com)
Ashlie Beringer – Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)
Ryan T. Bergsieker – Denver (+1 303.298.5774, rbergsieker@gibsondunn.com)
Keith Enright – Palo Alto (+1 650.849.5386, kenright@gibsondunn.com)
Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, geyler@gibsondunn.com)
Cassandra L. Gaedt-Sheckter – Palo Alto (+1 650.849.5203, cgaedt-sheckter@gibsondunn.com)
Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com)
Lauren R. Goldman – New York (+1 212.351.2375, lgoldman@gibsondunn.com)
Stephenie Gosnell Handler – Washington, D.C. (+1 202.955.8510, shandler@gibsondunn.com)
Natalie J. Hausknecht – Denver (+1 303.298.5783, nhausknecht@gibsondunn.com)
Jane C. Horvath – Washington, D.C. (+1 202.955.8505, jhorvath@gibsondunn.com)
Martie Kutscher Clark – Palo Alto (+1 650.849.5348, mkutscherclark@gibsondunn.com)
Kristin A. Linsley – San Francisco (+1 415.393.8395, klinsley@gibsondunn.com)
Vivek Mohan – Palo Alto (+1 650.849.5345, vmohan@gibsondunn.com)
Ashley Rogers – Dallas (+1 214.698.3316, arogers@gibsondunn.com)
Sophie C. Rohnke – Dallas (+1 214.698.3344, srohnke@gibsondunn.com)
Eric D. Vandevelde – Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)
Frances A. Waldmann – Los Angeles (+1 213.229.7914,fwaldmann@gibsondunn.com)
Debra Wong Yang – Los Angeles (+1 213.229.7472, dwongyang@gibsondunn.com)

Europe:
Ahmed Baladi – Paris (+33 1 56 43 13 00, abaladi@gibsondunn.com)
Patrick Doris – London (+44 20 7071 4276, pdoris@gibsondunn.com)
Kai Gesing – Munich (+49 89 189 33-180, kgesing@gibsondunn.com)
Joel Harrison – London (+44 20 7071 4289, jharrison@gibsondunn.com)
Lore Leitner – London (+44 20 7071 4987, lleitner@gibsondunn.com)
Vera Lukic – Paris (+33 1 56 43 13 00, vlukic@gibsondunn.com)
Lars Petersen – Frankfurt/Riyadh (+49 69 247 411 525, lpetersen@gibsondunn.com)
Christian Riis-Madsen – Brussels (+32 2 554 72 05, criis@gibsondunn.com)
Robert Spano – London/Paris (+44 20 7071 4000, rspano@gibsondunn.com)

Asia:
Connell O’Neill – Hong Kong (+852 2214 3812, coneill@gibsondunn.com)

This recorded webcast explores criminal and civil enforcement actions against individuals in the Trump administration. Our panel of defense lawyers breaks down notable prosecutions and emerging patterns in securities and financial fraud and discusses how best to navigate these cases within the U.S. Department of Justice. This session provides critical insights into how to proactively protect your executives from legal exposure whether you are in-house counsel, a compliance officer, or part of a board of directors.

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.5 credit hours, of which 1.5 credit hours may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.5 hours in the General category.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

PANELISTS:

Nick Hanna is a partner in Gibson Dunn’s Los Angeles office and Co-Chair of the firm’s White Collar Defense and Investigations Practice Group. He represents Fortune 500 companies and executives in high-stakes civil litigation, white collar crime, and regulatory and securities enforcement – including internal investigations, False Claims Act cases, and compliance counseling. A former United States Attorney for the Central District of California, Nick draws on his extensive government and trial experience to advise boards and senior executives in matters involving the DOJ, SEC, and other enforcement agencies.

Jordan Estes is a partner in Gibson Dunn’s New York office and a member of the firm’s White Collar Defense and Investigations Practice Group. A former federal prosecutor with over a decade of white-collar experience, including more than eight years at the U.S. Attorney’s Office for the Southern District of New York, she has served as lead or co-lead counsel in numerous high-profile federal trials. She represents individuals and corporations in complex and sensitive criminal and regulatory investigations, trials, and proceedings before federal and state agencies.

Douglas Fuchs is a partner in Gibson Dunn’s Los Angeles office and Co-Chair of the firm’s Los Angeles Litigation Department. He represents clients in white-collar and regulatory enforcement matters—including securities fraud, public corruption, antitrust, and FCPA issues—conducts internal investigations, develops compliance programs, and handles complex civil litigation arising from related criminal or regulatory actions. Prior to joining the firm, Doug was an Assistant U.S. Attorney for the Central District of California for seven years, and served as Deputy Chief of the Major Frauds Section.

Dani R. James is a partner in Gibson Dunn’s New York office and a member of the firm’s White Collar Defense and Investigations Practice Group. A former federal prosecutor in the Southern District of New York, she represents companies and executives in complex criminal, regulatory, and civil matters involving allegations such as insider trading, corruption, and FCPA violations. She also has extensive experience conducting internal investigations and advising boards and committees on compliance and litigation strategy.

Mike Martinez is a partner in Gibson Dunn’s New York office and a member of the firm’s White Collar Defense and Investigations Practice Group. A former Assistant U.S. Attorney for the District of New Jersey, he is a leading white-collar defense attorney with extensive trial experience. He represents individuals and corporations in matters involving health care fraud, securities fraud, public corruption, and related internal investigations.

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

Gibson Dunn has extensive experience advising multinational companies operating online services on a wide variety of regulatory and law enforcement investigation, enforcement, strategic counseling, litigation, and appellate matters relating to youth online safety, including on privacy and AI-related issues.

During the investigation phase, State Attorneys General (State AGs) have broad authority to seek documents and information from both targets and witnesses, typically through the use of Civil Investigative Demands (CIDs). During this phase, a defendant is often hamstrung in the information it can obtain from the State, usually limited to what it can obtain through public records act requests. Once the matter proceeds to litigation, however, a defendant has for the first time the opportunity to formally seek information in discovery from the State. This opportunity for offensive discovery can be useful to level the playing field for defendants who may have been the subject of extensive information requests prior to the onset of litigation. And particularly useful may be discovery from state agencies involved in the matter other than the State AG. For instance, in a procurement fraud case, discovery from the agency involved in the purchasing decision may be useful.

Recently, there has been significant litigation surrounding the extent to which records from other state agencies are directly discoverable as party discovery from the State AG in matters brought by the AG–i.e., are within the possession and control of the State AG’s office. Courts have issued conflicting decisions. Some courts have found that when a State AG files a lawsuit it is responsible for producing discovery on behalf of the state’s agencies because the AG purports to act on behalf of the entire state.

Other courts have found, however, that defendants must serve third-party subpoenas to obtain documents from state agencies because the State AG does not have possession or control over the documents held outside of its office. Further, State AGs generally oppose requests for production of documents from other state agencies on the grounds of burden. In such cases, this process may be less effective in states that have legal frameworks to shield agencies from discovery demands, producing a protective effect similar to federal Touhy regulations, which restrict to some degree state employees’ ability to comply with subpoenas relating to the state agency’s work.[1]

Practitioners should be aware of how the relevant jurisdiction handles this issue prior to seeking state agency discovery.

I. Courts Holding The State AG Must Produce Documents From Other State Agencies

Recently the Eastern District of Washington addressed this issue in United States v. MultiCare Health Systems. On August 12, the district court ordered the Washington State AG to produce records from state agencies. See Order, Dkt. No. 102, U.S. v. MultiCare Health Sys. et al., 2:22-cv-00068-SAB (E.D. Wash. Aug. 12, 2025). In this matter, the State of Washington alleged that the defendant hospital system knowingly overbilled Medicaid for the costs of fake and medically unnecessary procedures as part of an alleged fraud scheme by a neurosurgeon. During discovery, the defendant served requests for production on the AG seeking documents from the Washington State Health Care Authority (HCA) related to its Medicaid reimbursement policies, and from the Washington State Department of Health (DOH) related to its investigation of the neurosurgeon. The State opposed the motion, arguing that because the agencies were not named in the complaint, the defendant must follow the procedure for serving nonparty subpoena requests under Federal Rule of Civil Procedure 45. The court disagreed, holding that, because the state “has the legal right to obtain documents upon demand from state agencies,” “discovery addressed to the State of Washington includes its agencies.” Id. at *3 (emphasis added) (citing Washington v. GEO Group, Inc., 2018 WL 9457998, *3 (W.D. Wash. 2018)). The court thus ordered the State’s compliance with the discovery requests as to both the documents related to the investigation by the DOH and the general Medicaid reimbursement policies from the HCA.

In June 2023, the Northern District of Illinois reached a similar conclusion in Illinois ex rel. Raoul v. Monsanto Co. In that case, the Illinois Attorney General brought an environmental action against Monsanto Company and its subsidiaries, alleging that Monsanto’s polychlorinated biphenyls (PCBs) and other hazardous materials contaminated the Illinois environment. See Illinois ex rel. Raoul v. Monsanto Co. et al., 2023 WL 4083934, at *1 (N.D. Ill. June 20, 2023). During discovery, Monsanto sought responsive documents in the possession of state agencies that were referenced in the State’s complaint. Id. Monsanto argued that the Illinois AG had the legal authority to obtain documents held by state agencies, and therefore, the State was “obligated to produce responsive documents in the possession, custody, or control of state agencies.” Id. The State objected on separation-of-powers grounds and asserted that the AG could not produce such documents because the AG “does not have an unfettered legal right to obtain documents from non-party state agencies.” Id. The court rejected the State’s constitutional arguments. Id. It instead found that “principles of fundamental fairness” permitted defendants’ discovery of responsive documents in the possession of those agencies referenced in the State’s complaint. Id. at *4. The court reasoned that those agencies “undoubtedly hold many relevant documents” and would benefit from the AG’s success. Id. Further, the court held that the Illinois AG had control over responsive documents possessed by state agencies referenced in the complaint. Id. at *6. It explained that this control was based on the AG’s “broad statutory and common law powers to control and manage legal affairs on behalf of state agencies.” Id. at *5. Finally, the court opined that third-party discovery tools were “not very efficient” and less likely than direct party discovery to achieve results consistent with Federal Rules of Civil Procedure 1 and 26. Id. at *7. Nevertheless, the court found that Monsanto must use third-party discovery tools to the extent it sought documents from state agencies not named in the complaint. Id.

II. Courts Holding The Defendant Must Use A Third-Party Subpoena To Seek Documents From Other State Agencies

A recent decision from the Ninth Circuit reached a different result. On August 22, 2025, the Ninth Circuit vacated an order requiring State AGs and third-party state agencies to respond to discovery requests seeking, among other things, communications between the states and other government entities, including federal, state, and local agencies. See In re People of the State of California, No. 25-584, 2025 WL 2427608 (9th Cir. Aug. 22, 2025). In an unpublished opinion, a three-judge panel exercised the court’s infrequently invoked mandamus authority to block a discovery order requiring third-party agencies to produce responsive documents. The Court held that under the California state appellate court decision in People ex rel. Lockyer v. Superior Court, 122 Cal. App. 4th 1060 (2004), even in cases where the state is a litigant, the California AG is not deemed to have possession, custody, or control over all documents of any state agency.

The Lockyer decision highlights a distinction between requests for documents related to the investigation versus those that may be relevant, but not directly related to, that investigation. In Lockyer, the court found that “to the extent that any state agencies had a role” in the investigation, “documents related to that investigation may be sought directly from the People.” 122 Cal. App. 4th at 1078 (emphasis removed). In contrast, when a state agency generates documents as part of its “ordinary course” duties, it operates as a third-party to the lawsuit and a “distinct and separate governmental entit[y]” that “can be compelled to produce documents only upon a subpoena.” Id. The court’s analysis, echoed by the State AGs in their arguments to the Ninth Circuit panel in In re People of the State of California, points to the California Constitution and statutes in support of the assertion that “[e]ach agency or department of the state is established as a separate entity.” Id. In Lockyer, the court also stated it “would be unduly burdensome if any time the People are a party to litigation they are required to search for documents from any and all state agencies that the propounding party demands.” Id. at 1080.

Although the Ninth Circuit in In re People of the State of California relied on Lockyer to grant mandamus, it did not grant mandamus as to requests to Pennsylvania state agencies, because Pennsylvania law “explicitly grants [the Attorney General’s] office control over the documents of nonparty state agencies.” In re People of the State of California, 2025 WL 2427608, at *3 (citing 71 Pa. Stat. and Cons. Stat. § 732-208 (West 2025)).

The Eastern District of New York reached a similar result in United States v. Am. Express Co., No. 10-CV-04496 (NGG) (RER), 2011 WL 13073683, at *2 (E.D.N.Y. July 29, 2011). In that case, the court found that “state agencies—even those that are part of the executive branch—are neither subject to common executive control nor interrelated with the State Attorneys General, and so should not be aggregated together for discovery purposes.” 2011 WL 13073683, at *2. The court based its finding on the independent and separately elected nature of the State Attorneys General Office pursuant to state constitutions and statutes. The court nonetheless acknowledged that “party discovery would be unquestionably more efficient” and less burdensome for the party seeking state agency discovery than using a Rule 45 subpoena. Id. at *4. The court also urged the State AG’s office to “take an active role in encouraging” the agencies’ cooperation with responding to the document requests. Id.

As the court in Am. Express Co. noted, defendants in AG litigation seeking discovery from state agencies often prefer to do so through party discovery served on the AG, as opposed to being required to follow subpoena processes. Party discovery is simpler, more efficient, and has fewer procedural hurdles. AG offices, however, will often challenge such discovery, claiming that the materials of other agencies are not within the AG’s “control” and that it is unduly burdensome for the AG to collect materials from other agencies. In seeking agency discovery, it is incumbent on counsel to understand the dynamic and relationship between the various state agencies at issue, as well as the principles of law governing the jurisdiction at hand. And while the decisions above may impact how a defendant seeks documents, they do not foreclose the option of seeking such documents as part of a party’s litigation strategy.

[1] See e.g. Cal. Evid. Code § 1040 (West) (public entities’ privilege to “refuse to disclose official information” and “prevent another from disclosing official information”); Tex. R. Civ. P. 176.6 (statutory limitation on the designation of an appropriate employee to testify on agency matters).

The following Gibson Dunn lawyers prepared this update: Natalie Hausknecht, Poonam Kumar, James Zelenay, Zoey Clark, Kate Googins, Zachary Montgomery, Theo Takougang, and Dylan Morrissey*.

Gibson Dunn’s State AG Task Force assists clients in responding to subpoenas and civil investigative demands, interfacing with state or local grand juries, representing clients in civil and criminal proceedings, and taking cases to trial.

Gibson Dunn lawyers are closely monitoring developments and are available to discuss these issues as applied to your particular business. If you have questions, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following members of Gibson Dunn’s State Attorneys General (AG) Task Force, who are here to assist with any AG matters:

State Attorneys General (AG) Task Force:

Artificial Intelligence:
Keith Enright – Palo Alto (+1 650.849.5386, kenright@gibsondunn.com)
Eric D. Vandevelde – Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Antitrust & Competition:
Eric J. Stock – New York (+1 212.351.2301, estock@gibsondunn.com)

Climate Change & Environmental:
Rachel Levick – Washington, D.C. (+1 202.887.3574, rlevick@gibsondunn.com)

Consumer Litigation & Products Liability:
Christopher Chorba – Los Angeles (+1 213.229.7396, cchorba@gibsondunn.com)

Consumer Protection:
Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, geyler@gibsondunn.com)
Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com)
Natalie J. Hausknecht – Denver (+1 303.298.5783, nhausknecht@gibsondunn.com)
Ashley Rogers – Dallas (+1 214.698.3316, arogers@gibsondunn.com)

DEI & ESG:
Stuart F. Delery – Washington, D.C. (+1 202.955.8515,sdelery@gibsondunn.com)
Mylan L. Denerstein – New York (+1 212.351.3850, mdenerstein@gibsondunn.com)

False Claims Act & Government Fraud:
Winston Y. Chan – San Francisco (+1 415.393.8362, wchan@gibsondunn.com)
Jonathan M. Phillips – Washington, D.C. (+1 202.887.3546, jphillips@gibsondunn.com)
Jake M. Shields – Washington, D.C. (+1 202.955.8201, jmshields@gibsondunn.com)
James L. Zelenay Jr. – Los Angeles (+1 213.229.7449, jzelenay@gibsondunn.com)

Labor & Employment:
Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Los Angeles (+1 213.229.7107, ksmith@gibsondunn.com)

Privacy & Cybersecurity:
Ryan T. Bergsieker – Denver (+1 303.298.5774, rbergsieker@gibsondunn.com)
Cassandra L. Gaedt-Sheckter – Palo Alto (+1 650.849.5203, cgaedt-sheckter@gibsondunn.com)
Vivek Mohan – Palo Alto (+1 650.849.5345, vmohan@gibsondunn.com)

Securities Enforcement:
Osman Nawaz – New York (+1 212.351.3940, onawaz@gibsondunn.com)
Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com)
David Woodcock – Dallas (+1 214.698.3211, dwoodcock@gibsondunn.com)
Lauren Cook Jackson – Washington, D.C. (+1 202.955.8293, ljackson@gibsondunn.com)

Tech & Innovation:
Ashlie Beringer – Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

White Collar & Litigation:
Collin Cox – Houston (+1 346.718.6604,ccox@gibsondunn.com)
Trey Cox – Dallas (+1 214.698.3256,tcox@gibsondunn.com)
Nicola T. Hanna – Los Angeles (+1 213.229.7269, nhanna@gibsondunn.com)
Allyson N. Ho – Dallas (+1 214.698.3233,aho@gibsondunn.com)
Poonam G. Kumar – Los Angeles (+1 213.229.7554, pkumar@gibsondunn.com)

*Dylan Morrissey is an associate working in the firm’s Los Angeles office who is not yet admitted to practice law.

Gibson Dunn’s Workplace DEI Task Force aims to help our clients navigate the evolving legal and policy landscape following recent Executive Branch actions and the Supreme Court’s decision in SFFA v. Harvard. Prior issues of our DEI Task Force Update can be found in our DEI Resource Center.

Key Developments:

On November 19, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued new guidance entitled “Discrimination Against American Workers Is Against the Law.” The guidance states that “[n]ational origin discrimination can include preferring foreign workers, including workers with a particular visa status, over American workers,” and that “anti-American national origin discrimination” can take the form of discriminatory job advertisements, disparate treatment of applicants or employees in the terms, conditions, or privileges of employment, harassment based on national origin, and retaliation because an individual has engaged in protected activity, such as opposing national origin discrimination at work. The guidance further states that employers are not entitled to hire foreign workers over equally qualified American workers on the basis of national origin, even if there is a “[c]ustomer or client preference,” a “[l]ower cost of labor,” or a “[b]elief[] that workers from one or more national origin groups” have a “better work ethic.” The guidance relates to the Department of Labor’s recently announced initiative Project Firewall, “an H-1B enforcement initiative that will safeguard the rights, wages, and job opportunities of highly skilled American workers by ensuring employers prioritize qualified Americans when hiring workers and holding employers accountable if they abuse the H-1B visa process.” In a recent press release applauding the EEOC for “taking action to help prevent discrimination against American workers,” U.S. Department of Labor Secretary Lori Chavez-DeRemer and Deputy Secretary Keith Sonderling noted that, through Project Firewall, the EEOC, Labor Department, and other government agencies intend to share information and coordinate efforts to “proactively combat unlawful discrimination against American workers and properly enforce the law by leveraging the full strength of the federal government.”

On November 18, President Trump nominated M. Carter Crow to serve as the next General Counsel of the EEOC. Crow is currently Global Head of Employment and Labor at the law firm Norton Rose Fulbright. In a recent interview, Crow stated that he is “strongly supportive of all of the priorities” the EEOC’s current leadership has espoused and is “very interested” in religious bias cases.

On November 18, the EEOC announced that it had filed an action in federal court to enforce a subpoena to the University of Pennsylvania. The EEOC issued the subpoena in relation to its investigation into the University following a December 2023 Commissioner’s charge alleging that the school subjected faculty and staff to antisemitic harassment, failed to effectively address complaints of harassment, failed to take prompt and effective measures to end harassment, and allowed harassment to escalate. The subpoena requests, among other things, the identification of and contact information for witnesses to and victims of the religious-based harassment. It also seeks the identification of and contact information for employees who have filed discrimination complaints relating to their Jewish faith, those who belong to Jewish clubs or campus groups, and anyone who works in the university’s Jewish studies program. EEOC Chair Andrea Lucas stated that the University “continues to refuse to identify members of its workforce who may have been subjected to this unlawful conduct,” effectively “undermin[ing] the EEOC’s ability to investigate harassment.” The case is EEOC v. Trustees of the University of Pennsylvania, Case No. 2:25-cv-06502).

On November 14, Judge Rita F. Lin of the U.S. District Court for the Northern District of California issued an order granting the American Association of University Professors a preliminary injunction. The injunction bars the Trump Administration from withholding federal funds from the University of California system without complying with all federal procedural and substantive requirements governing the termination of such funds. The plaintiffs, which include the American Association of University Professors and numerous other higher education unions, brought claims for violations of the Administrative Procedure Act, Title VI, Title IX, the First Amendment, the Tenth Amendment, the Spending Clause, and the Separation of Powers doctrine. The court found that while “[r]ooting out antisemitism is undisputedly a laudable and important goal,” the Trump administration “engaged in a concerted policy to use allegations of antisemitism to justify funding cancellations,” when the actual intent was to “coerce universities into purging disfavored ‘left’ and ‘woke’ viewpoints from their campuses and replace them with views that the Administration favors.” The court held that the “undisputed record” showed that the administration “engaged in coercive and retaliatory conduct in violation of the First Amendment and Tenth Amendment” and “flouted the requirements of Title VI and IX and cancelled funding in an arbitrary and capricious manner.” The case is American Association of University Professors et al. v. Trump et al., No. 25-07864 (N.D. Cal. 2025).

On November 6, the Sixth Circuit issued an en banc decision, striking down an Olentangy Local School District policy that prohibited students from using another student’s biological pronouns when they know those pronouns are “contrary to the other student’s identity.” The court, balancing the First Amendment rights of students against the District’s interest in protecting its students from bullying and harassment, found that the “District’s ban on the use of biological pronouns regulates speech on a public concern in a way that discriminates based on viewpoint.” Further, the court found that the District did not meet the “heavy evidentiary burden to justify the ban” and that it was required to identify “something more than a mere desire to avoid the discomfort and unpleasantness that always accompany an unpopular viewpoint.” The court discussed that under Supreme Court precedent, a school official may only “silence speech” if it will cause a “substantial disruption” to school activities or infringe on the “rights of others” in the school community, but held that using a student’s biological pronouns as opposed to their preferred pronouns was neither substantially disruptive, nor a violation of the rights of other students, as articulated under “the Constitution, a federal statute, or a state law.” The court ultimately found that an “appropriately tailored preliminary injunction” barring the District from “punishing students for the commonplace use of biological pronouns” provided the “best balance” of the competing interests at issue. Five judges in the majority issued separate concurring opinions. The 7-judge dissent to the en banc decision would have held that the District had met its burden under Supreme Court precedent to reasonably forecast that the speech at issue would “materially and substantially disrupt the work and discipline of the school” (Tinker v. Des Moines Indep. Cmty. Sch. Dist., 393 U.S. 503, 513 (1969)). The case is Defending Education v. Olentangy Local School District, No. 23-3630 (6th Cir. 2025).

On November 7, Cornell University announced that it had reached an agreement with the Trump administration to settle several federal agency investigations into alleged violations of antidiscrimination laws by the University, including whether it unlawfully considered race in admissions decisions and adequately protected Jewish students from harassment during pro-Palestinian protests. Under the terms of the settlement, Cornell agreed to pay $30 million to the government over the next three years and to invest an additional $30 million in agricultural research programs, as agriculture was a major catalyst for Cornell’s creation in 1865. Cornell agreed to provide the “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” issued by the Attorney General on July 29, 2025, “as a training resource to faculty and staff so long as that Guidance remains operative,” and to provide the government with “anonymized undergraduate admissions data” for “statistical analyses.” The agreement states that nothing in its terms “shall be construed as giving the United States authority to dictate the content of academic speech or curricula.”

Michael I. Kotlikoff, President of the University, released a statement regarding the settlement. Kotlikoff notes that, under the agreement, Cornell did not admit any wrongdoing. Kotlikoff explained that the “months of stop-work orders, grant terminations, and funding freezes have stalled cutting-edge research, upended lives and careers, and threatened the future of academic programs at Cornell” but that the agreement allows Cornell to revive its partnership with the federal government “while affirming the university’s commitment to the principles of academic freedom, independence, and institutional autonomy.”

On November 6, President Trump named Andrea Lucas as Chair of the EEOC. She had been serving as the Acting Chair since January 2025. Lucas was first nominated as a Commissioner in 2020 during President Trump’s first term and was renominated in March of this year and confirmed by the Senate to a second term on July 31. Lucas stated that under the Trump administration, “the Commission has made significant progress advancing its core mission to uphold [the] nation’s civil rights laws and protect American workers through consistent, effective enforcement,” and that as Chair, she will “remain committed to enforcing the law evenhandedly, advancing equal opportunity, and upholding merit-based, colorblind equality in America’s workplaces.” The following day, she also announced that, because Brittany Panuccio’s swearing-in as a Commissioner established a quorum, the Commission is now enabled to pursue a “larger suite” of lawsuits. Lucas stated that the Commission, which filed nearly 100 lawsuits in the recent fiscal year, is “ready to hit the ground running” and “bring all types of litigation, including larger-scale litigation, like systemic cases and pattern or practice cases.”

On October 31, Judge Barbara Jacobs Rothstein of the U.S. District Court for the Western District of Washington issued an order granting a preliminary injunction to the City of Seattle, enjoining the Trump administration from enforcing Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”) and Executive Order 14168 (“Defending Women From Gender Ideology Extremism and Restoring Biological Trust to the Federal Government”) (“the EO(s)”). The City alleges that the EOs violate principles of separation of powers, the Fifth and Tenth Amendments, and the Spending Clause of the U.S. Constitution and are arbitrary and capricious in violation of the Administrative Procedure Act. In granting the preliminary injunction, the court concluded that EO 14173 is aimed at advancing “the Trump Administration’s own interpretation of ‘discrimination’ through the threat of the loss of federal funding and/or [False Claims Act] investigations and penalties” and rejected the government’s argument that imposing the terms of EO 14168 in its grants is authorized by Congress because a “condition barring recipients from ‘promoting gender ideology,’ or any other politically charged policy matter, bears no resemblance to the administrative, procedural, and performance-based conditions enumerated by Congress.” Thus, the court held that the City demonstrated a likelihood of success on its claims that, by imposing the terms of the EOs on cities, the Trump administration had run afoul of the separation of powers doctrine and was acting in excess of statutory authority in violation of the Administrative Procedure Act. The court also held that Seattle had shown it would suffer irreparable harm, as the loss of federal funding would threaten a wide array of public safety, law enforcement, first responder, and anti-terrorism services, as well as critical transportation and infrastructure projects and supportive housing and care services. The case is City of Seattle v. Trump et al., No. 2:25-01435 (W.D. Wash. 2025).

On October 22, University of Virginia interim President Paul Mahoney announced that UVA reached an agreement with the Department of Justice (“DOJ”) regarding the government’s remaining federal investigations. Under the agreement, which does not require UVA to make any monetary payments, the University “affirms its commitment to complying” with federal civil rights law and agrees to apply such law consistent with DOJ’s July 29, 2025 “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” “so long as that Guidance remains in force” and “consistent with relevant judicial decisions.” The University agreed to provide DOJ with quarterly reports on its efforts to comply with federal law through December 31, 2028. The government agreed to suspend its investigations and treat UVA as eligible for all grants, contracts, and awards. The agreement also states that nothing in its terms “shall be construed as giving the United States authority to dictate the content of academic speech or curricula.” Mahoney stated that the “agreement represents the best available path forward” and that the University intends to “redouble” its “commitment to the principles of academic freedom, ideological diversity, [and] free expression.&rdquo

Media Coverage and Commentary:

Below is a selection of recent media coverage and commentary on these issues:

Wall Street Journal, “Trump’s DEI Slayer Is Just Getting Started” (November 19): Lauren Weber of the Wall Street Journal reports that EEOC Chair Andrea Lucas has prioritized cracking down on faith-based discrimination and what the agency views as unlawful DEI programs. According to Weber, “Lucas has said she is attacking the identity politics she believes has permeated workplaces and the broader culture.” After the recent confirmation of Commissioner Brittany Panuccio, the EEOC now has a quorum, which, according to Weber, gives Lucas “the power to do more.” Weber reports that the EEOC under Lucas is carrying out an ambitious agenda, from rescinding guidance on protections for transgender and nonbinary workers and combating DEI programs that the administration considers unlawful, to probing law firms’ diversity practices, investigating universities’ responses to antisemitism, and recovering funds for workers subject to Covid vaccine mandates despite religious objections. Former colleagues of Lucas describe her as “outspoken,” “dedicated,” and “smart.” Jason Schwartz, co-chair of Gibson Dunn’s labor and employment group, where Lucas worked prior to joining the EEOC, said that “[s]he has a really strong legal mind and was among the brightest associates I worked with over the years.”
The Hill, “Minority Health Researchers Walk Tightrope Amid NIH Funding Cuts” (November 8): The Hill’s Surina Venkat reports on the funding difficulties faced this year by minority health researchers, who assert that they “are facing unclear research directives, increasingly competitive grant awards and politicized peer review processes as they battle to sustain their work improving health outcomes for minority populations.” Venkat states that such challenges began for the researchers earlier this year, after President Trump directed agencies to terminate DEI-related grants and programs, resulting in the cancellation of several hundred NIH grants. Venkat also reports that while the NIH will continue to fund and study minority health, NIH Director Jay Bhattacharya stated in an August directive that the agency will prioritize research focused on “solution-oriented approaches” to minority health, rather than research focused on identifying and diagnosing disparities in health care outcomes. The NIH also will institute a new funding policy, offering multiyear, upfront funding for research projects. And the article notes that recent changes to the peer-review process mean that political appointees will play an increased role in making funding decisions. Researchers interviewed for the article stated they expect the policy changes will result in fewer funds being awarded each year and will make planning projects more difficult. To overcome these challenges, researchers interviewed for the article reported they intend to apply for more grants moving forward to increase their chances of securing funding. Others will seek private donations in place of federal funding. Researchers remarked on the need to use clear and specific language in describing their work and expected implications, avoiding blanket terms that might sound in the vocabulary of DEI.
Law360, “ABA Changes DEI Scholarship Requirement Amid Lawsuit” (November 3): Emily Sawicki with Law360 reports that the American Bar Association (“ABA”) has revised the eligibility criteria for its Legal Opportunity Scholarship for first-year law students from being limited to “member[s] of an underrepresented racial and/or ethnic minority” to being open to applicants who “have demonstrated a strong commitment to advancing diversity, equity, and inclusion.” Sawicki reports that The American Alliance for Equal Rights is currently suing the ABA in the U.S. District Court for the Northern District of Illinois, claiming that offering a scholarship exclusive to members of racial and ethnic minority groups violates Section 1981 of the Civil Rights Act by discriminating against white law students. The ABA has moved to dismiss the suit, but the court has not yet ruled on the motion.
Law360, “Depleted Ranks At EEOC Won’t Impede Trump Policy Agenda” (October 31): Anne Cullen of Law360 reports that, according to experts, record-low staff levels at the EEOC should not impact EEOC Chair Andrea Lucas’s plans to realign EEOC policies with President Trump’s priorities. With the recent appointment of former assistant U.S. attorney Brittany Panuccio to the EEOC, the Commission now has a three-member quorum for pursuing major policy initiatives, despite being staffed by its lowest personnel count since 1980. Cullen reports that experts expect EEOC Chair Lucas to prioritize policy changes related to the EEOC’s current harassment in the workplace guidance and Pregnant Workers Fairness Act regulations, both of which Lucas opposed as an EEOC Commissioner.
Washington Post, “As Some DEI Critics Say Victory is Near, Companies Face New Pushback Over Rollbacks” (October 28): Taylor Telford of the Washington Post reports on the number of large employers that have reassessed their DEI programs since the Supreme Court’s 2023 SFFA v. Harvard decision and President Trump’s re-election last year. According to Telford, following President Trump’s anti-DEI executive orders earlier this year, many employers have opted to drop their workforce representation goals, diversity initiatives, and identity-focused programs or otherwise rebrand away from DEI. At the same time, employers who have rolled back their DEI programs are facing internal and public pushback, highlighting reputational and workforce risks. For example, Telford’s reporting describes the tension many companies are facing, including one company that faced a recent boycott led by civil rights leaders and consumers opposed to the company’s DEI changes and another company losing out on a government contract with the City of London for no longer meeting its diversity criteria.
Associated Press, “Black Enrollment is Waning at Many Elite Colleges After Affirmative Action Ban, AP Analysis Finds” (October 23): Collin Binkley with the Associated Press (“AP”) reports that, after analyzing recent enrollment data at 20 selective colleges, the AP has found a clear decline in the percentage of Black freshmen in the two admission cycles since the Supreme Court banned race-conscious admissions. According to Binkley, and based on the AP’s analysis, Hispanic enrollment also declined at many schools, while trends for white and Asian-American students were mixed. Binkley further reports that the Trump administration has ramped up its oversight of college admissions, including scrutinizing colleges’ use of applicant diversity statements as unlawful “racial proxies.” Binkley offers reactions from Richard Kahlenberg, a researcher at the Progressive Policy Institute, who believes colleges have lawful alternatives for promoting racial diversity, such as giving stronger preferences to low-income applicants and ending legacy admissions.

Case Updates:

Below is a list of updates in new and pending cases:

1. Contracting claims under Section 1981, the U.S. Constitution, and other statutes:

American Alliance for Equal Rights v. American Bar Association, No. 1:25-cv-03980 (N.D. Ill. 2025): On April 12, 2025, the American Alliance for Equal Rights (“AAER”) sued the ABA in relation to its Legal Opportunity Scholarship, which AAER asserts violates Section 1981. According to the complaint, the scholarship awards $15,000 to 20–25 first-year law students per year. To qualify, an applicant must be a “member of an underrepresented racial and/or ethnic minority.” The complaint alleges that “White students are not eligible to apply, be selected, or equally compete for the ABA’s scholarship.” AAER seeks a TRO and preliminary injunction barring the ABA from selecting winners for this year’s scholarship, as well as a permanent injunction barring the ABA from knowing or considering applicants’ race or ethnicity when administering the scholarship. On June 16, 2025, the ABA moved to dismiss the complaint for failure to state a claim. The ABA argued that AAER failed to allege that it has any members with standing to pursue the claim on their own behalf. The ABA further argued that AAER failed to state a Section 1981 claim because AAER did not allege a contractual relationship with the ABA. The ABA also argued that the relief sought would impede the ABA’s First Amendment rights to free speech and expression, and that the “ABA has a First Amendment right to distribute funds as it deems appropriate.” AAER filed an amended complaint on June 25, 2025 making new allegations about the ABA’s commitment to diversity and beliefs around refusing to contract with persons of certain races. On July 30, 2025, the ABA moved to dismiss the amended complaint on the same grounds it moved to dismiss the initial complaint, asserting that the new facts pled in the amended complaint failed to overcome the shortcomings of the initial complaint.
- Latest update: On August 29, 2025, AAER filed its opposition to the ABA’s motion to dismiss, arguing that the amended complaint plausibly alleges standing because white applicants were denied an equal opportunity to compete “regardless [of] whether a white student took the futile step of applying.” AAER further argued that the complaint plausibly alleges a Section 1981 claim because the ABA’s scholarship program implicates the defendants’ privacy policies and terms of service, which are contracts. Finally, AAER argues that the ABA’s First Amendment defense fails, including because Section 1981 regulates conduct, not speech. The ABA filed its reply on September 17, 2025. On October 31, 2025, AAER filed a notice advising the court that the ABA’s scholarship no longer requires applicants to “be a member of an underrepresented racial and/or ethnic minority” and instead now requires applicants to “have demonstrated a strong commitment to advancing diversity, equity, and inclusion (DEI).” AAER accused the ABA of failing to timely bring these changes to the court’s attention. On November 6, 2025, the court struck AAER’s notice from the record, stating that the reason for the notice was “a mystery since no relief was requested,” and that, given that the ABA had not raised any argument that the case was now moot in light of changes to its policy, the court was “unwilling to follow the parties down this rabbit hole” and would not grant further briefing on the issue.
City of Seattle v. Trump et al., No. 2:25-cv-01435 (W.D. Wash. 2025): On July 31, 2025, the City of Seattle sued the Trump administration, challenging Executive Orders 14173 and 14168. The City alleges that the EOs violate principles of the separation of powers, the Fifth and Tenth Amendments, and the Spending Clause of the U.S. Constitution and are arbitrary and capricious in violation of the Administrative Procedure Act. The City asserts that enforcement of the EOs will result in the loss of “committed federal grants and contracts if” it does not abide by “improperly imposed (and impossibly vague) funding conditions.”
- Latest update: On October 31, 2025, the court granted Seattle’s motion for a preliminary injunction, finding that Seattle was likely to succeed on the merits because EOs 14173 and 14168 likely violate the separation of powers doctrine, which provides that the U.S. Constitution grants power of the purse to Congress alone. Additionally, the court found that the harm to Seattle in the absence of a preliminary injunction would be irreparable and certain because Seattle would lose government grants that support a wide array of public safety, law enforcement, and other services.
National Association of Scholars v. United States Department of Energy et al., No.1:25-cv-00077-DII (W.D. Tex. 2025): On January 16, 2025, the National Association of Scholars—a group of professors, faculty, and researchers at colleges and universities across the United States—sued the United States Department of Energy, alleging that the Department’s Office of Science unlawfully requires research grant applicants to show how they would “promote diversity, equity, and inclusion in research projects” through its Promoting Inclusive and Equitable Research (“PIER”) plan. The Association alleges that requiring grant applicants to show how they would promote DEI in their projects violates applicants’ First Amendment rights by requiring them to express ideas with which they disagree, that the Department lacked statutory authority to adopt the plan, and that the plan violates the procedural requirements of the Administrative Procedure Act. The Association seeks declaratory and injunctive relief. On March 31, 2025, the defendants filed a motion to dismiss. The defendants argue that the Association’s claims are moot, as the Department of Energy has rescinded the PIER plan requirement after President Trump issued EO 14151. On April 14, 2025, the Association filed an opposition to the motion to dismiss, arguing that the recission of the PIER plan requirement does not sufficiently moot the controversy because the requirement was “suspended,” and not “rescinded,” making the change temporary. The Association also argues that EO 14151 is currently being challenged in multiple lawsuits, and it is likely that the PIER plan requirement, or something similar, could be reimposed.
- Latest update: On October 27, 2025, the court granted the defendants’ motion to dismiss without prejudice, reasoning that the case was moot in light of the recission of the PIER Plan requirement.

2. Employment discrimination and related claims:

Bobowicz v. Powell et al., No. 5:24-cv-00246 (W.D.N.C.): On November 18, 2024, a former employee of the Federal Reserve Board sued the Chair of the Federal Reserve, the Chief Operating Officer, and four Federal Reserve supervision officials, alleging discrimination on the basis of his religion, race, gender, and sexual orientation in violation of his rights under Title VII of the Civil Rights Act and under the Age Discrimination in Employment Act. The plaintiff also claims he was discriminated against due to his religious beliefs, which precluded him from receiving the COVID-19 vaccination. He further alleges he became “a target for termination” because he was “a heterosexual, white, male who was the oldest employee in both his local and national [teams].” In addition to damages, reinstatement, and front and back pay, the plaintiff seeks a declaration that the Federal Reserve’s diversity initiatives violate the Fourteenth Amendment’s equal protection clause. On January 6, 2025, the plaintiff filed an amended complaint, adding allegations that “the Federal Reserve Board’s DEI policies were part of a more comprehensive federal effort to incorporate” protected characteristics into hiring and employment practices. On June 6, 2025, the plaintiff filed a second amended complaint, adding the Federal Reserve Bank of New York and two of its employees as defendants. The second amended complaint alleges that the plaintiff was employed by the Federal Reserve and constructively employed by the Federal Reserve Bank of New York, and that both are liable for the alleged discrimination and retaliation.
- Latest update: On July 7, 2025, defendants Jerome Powell, Chair of the U.S. Federal Reserve, and the individual board members of the U.S. Federal Reserve filed a motion to dismiss, or transfer for improper venue, the second amended complaint. They argued, among other things, that venue is improper, the plaintiff’s Section 1981 claim fails because Section 1981 does not “provide a remedy against federal officials,” vaccination status is not a protected class, and the plaintiff’s request for a religious accommodation is not a protected activity. On November 3, 2025, the plaintiff filed an opposition challenging these points. Separately, on August 25, 2025, the other group of defendants—the Federal Reserve Bank of New York and two of its employees—filed a motion to dismiss the plaintiff’s second amended complaint, arguing, among other things, that the complaint’s allegations are “conclusory, vague, and speculative,” including because the complaint does not define “DEI,” and the plaintiff lacks standing to sue because the plaintiff’s alleged injuries are not “fairly traceable to the challenged conduct.” On October 31, 2025, the parties stipulated to dismiss all claims against certain U.S. Federal Reserve defendants, the Federal Reserve Bank of New York, and certain employees thereof—leaving only Powell and the Board of Governors of the Federal Reserve System as defendants in the case.
Vaughn v. CBS Broadcasting, Inc., et. al., No. 2:24-cv-05570 (C.D. Cal. 2024): On July 1, 2024, a suit was filed against CBS Broadcasting by former Los Angeles news anchor Jeff Vaughn, alleging that CBS-affiliated Los Angeles stations, KCBS-TV and KCAL-TV, terminated his employment because he is “an older, white, heterosexual male.” Vaughn claims that CBS replaced him with a “younger minority news anchor” in violation of Section 1981, Title VII, and the Age Discrimination in Employment Act. The complaint points to public statements by CBS expressing its commitment to diversity, including statements discussing various representation goals. Vaughn, who is represented by America First Legal, is seeking over $5,000,000 in damages. On September 9, 2024, defendants CBS Broadcasting, Paramount Global, and Wendy McMahon, then-President and CEO at Paramount, filed an answer asserting seven affirmative defenses, including that the plaintiff failed to plead facts sufficient to state a claim, that CBS acted in good faith and without discriminatory motive, and that the plaintiff’s claims were barred by the First Amendment. On March 10, 2025, the defendants filed an amended answer, adding an eighth affirmative defense that the plaintiff failed to mitigate damages.
- Latest update: On October 31, 2025, the defendants moved for summary judgment, arguing that the termination was based on legitimate, nondiscriminatory grounds, the plaintiff lacked evidence of pretext or but-for causation, and the plaintiff failed to establish individual liability against defendant McMahon under Section 1981. The defendants further contended that CBS’s conduct, even if found discriminatory, would still be protected by the First Amendment. According to the defendants, CBS, a private company engaged in expressive activity, has a First Amendment right to choose who channels that expression.

3. Challenges to statutes, agency rules, executive orders, and regulatory decisions:

American Alliance for Equal Rights v. Bennett et al., No. 1:25-cv-00669 (N.D. Ill. 202); Nos. 25-02461, 25-02487 (7th Cir.): On January 21, 2025, AAER sued the Attorney General of Illinois, the Director of the Illinois Department of Human Rights, and the Secretary of State of Illinois, alleging that an Illinois law, SB 2930—which requires “qualifying nonprofits to gather and publicize” certain demographic data online—compels organizations to engage in unlawful discrimination. They assert that “[b]y forcing charities to publicize the demographics of their senior leadership, the law pushes them to hire candidates based on race.” AAER also alleges the law violates the First Amendment by compelling organizations “to speak about a host of controversial demographic issues.” On March 4, 2025, the United States intervened as a plaintiff. AAER filed a motion for preliminary injunction on April 4, 2025. The defendants subsequently moved to dismiss both complaints—for lack of subject matter jurisdiction as to the United States and failure to state a claim as to AAER—and opposed the preliminary injunction motion. On August 20, 2025, the court issued its ruling on the motions for preliminary injunction and to dismiss. The court granted in part the defendants’ motion to dismiss. The court held that AAER lacked standing to sue on behalf of its anonymous members based on alleged public disclosure, which the court held was too speculative to constitute injury in fact. However, the court held that AAER has standing to sue in relation to the collection of its members’ sensitive information. The court granted the motion to dismiss the United States, holding that it failed to allege an injury in fact and thus lacked standing as intervenor. The court denied AAER’s motion for preliminary injunction, reasoning that AAER proved neither likelihood of success on the merits nor irreparable harm. AAER and the United States filed notices of appeal on August 21, 2025 and August 25, 2025, respectively. On August 27, 2025, the parties stipulated to a stay of the enforcement of SB 2930 against AAER’s members for the duration of the appeal. On August 28, 2025, the district court granted the stay of enforcement and stayed all district court proceedings pending appeal.
- Latest update: AAER and the United States filed their appellate briefs on October 20, 2025. In its brief, AAER argues that the district court erred in finding its allegations too speculative to confer standing, because it was predictable that at least one officer or director, when asked, would have reported at least some demographic information. In its brief, the United States argues that the district court erred in finding that it lacked standing as an intervenor because “the United States has standing wherever an action has been commenced [] seeking relief from the denial of equal protection of the laws under the fourteenth amendment.”
Chicago Women in Trades v. Trump, et al., No. 1:25-cv-02005 (N.D. Ill. 2025): On February 26, 2025, Chicago Women in Trades (“CWIT”), a non-profit organization, sued President Trump, challenging EO 14151and EO 14173 on constitutional grounds. On April 14, 2025, the court preliminarily enjoined enforcement of key provisions of the EOs, including a provision terminating one of CWIT’s federal grants. On May 14 and 21, 2025, the Department of Labor filed status reports indicating its continued compliance with the court’s preliminary injunction. On July 7, 2025, the defendants moved to dismiss. The defendants argued that CWIT lacked standing to challenge certain “intra-governmental provisions” in the orders. They also argued that the court “should dismiss the President, DOJ and the Attorney General, and OMB and its Director based on considerations particular to those parties” and urged the court to reject each of CWIT’s claims as a matter of law. On July 8, 2025, the defendants filed a motion for an indicative ruling and partial stay. In their motion, the defendants “request[ed] that the Court issue an indicative ruling that on remand from the court of appeals it would modify the scope of its preliminary injunction” in light of Trump v. CASA’s holding that “district courts do not have equitable powers to issue a ‘universal injunction[.]’” The defendants also requested that the Court “stay the universal scope of the injunction pending resolution on appeal.” On July 25, 2025, the plaintiffs opposed this motion, asserting that “the government’s motion fails to raise any ground for reconsideration allowable under Federal Rule of Procedure 60(b).” The plaintiffs also asserted that the “injunction [the] Court entered does not conflict with CASA,” and that the government has not shown that it “would be irreparably harmed without a stay.”
- Latest update: On October 30, 2025, the court denied the government’s motion for a partial stay or to modify the scope of the injunction. Though the court acknowledged that the Trump v. CASA ruling cautioned against issuing injunctions that cover nonparties, the court nevertheless held that enjoining all enforcement of the certification provision of EO 14173—which mandates that all recipients of any contract or grant award “certify” certain matters, including that the recipient does not operate programs promoting DEI that violate any applicable federal anti-discrimination laws—was necessary “to afford CWIT complete relief,” including by protecting CWIT’s ability to partner and collaborate with others. The court further noted that its broad injunction was supported by “jurisdictional and remedial principles.”
Withrow v. United States et al., No. 1:25-cv-04073 (D.D.C. 2025): On November 20, 2025, LeAnne Withrow, a transgender woman who was an Illinois Army National Guard staff sergeant and now works as a lead military and family readiness specialist and civilian employee for the Illinois National Guard, filed a putative class action against United States officials in the U.S. District Court for the District of Columbia, alleging that the Trump administration’s policy of prohibiting transgender employees from using restrooms that align with their gender identity violates the Administrative Procedure Act and Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of sex. The plaintiff alleges that she has tried to work around the policy by using single-user restrooms, but that such facilities are often inconvenient or nonexistent.

4. Actions against educational institutions:

Students Against Racial Discrimination v. Regents of the University of California et al., No. 8:25-cv-00192 (C.D. Cal 2025): On February 3, 2025, Students Against Racial Discrimination sued the Regents of the University of California, alleging that UC schools discriminate against Asian American and white applicants by using “racial preferences” in admissions in violation of Title VI and the Fourteenth Amendment of the U.S. Constitution. The plaintiff alleged it has student members who are ready and able to apply to UC schools but are “unable to compete on an equal basis” because of their race. On August 14, 2025, the defendants moved to dismiss the complaint. The defendants argued that the plaintiffs lacked standing and that the complaint makes, at most, indiscriminate “barebones allegations” as to “every undergraduate, law, and medical school across all UC campuses.” The defendants also argued that the chancellor of each UC campus is entitled to sovereign immunity under the Eleventh Amendment. On September 26, 2025, the plaintiffs filed their opposition to the defendants’ motion to dismiss. The plaintiffs asserted that they adequately alleged standing because their members are part of a genuine membership organization and are “able and ready to apply” for admission to the University of California, but “will encounter racial discrimination if they do so.” They further argued that the amended complaint “alleges all that is needed to state a claim” because it includes allegations that “each of the University of California’s undergraduate colleges, law schools, and medical schools discriminates in favor of blacks and Hispanics and against Asian-Americans and whites when admitting students.” The court held a conference on October 28, 2025, in which it took the motion to dismiss under submission and set a bench trial for October 2027.
- Latest update: On October 28, 2025, the plaintiff voluntarily withdrew all claims “related to defendants’ medical-school admissions policies” without prejudice. The plaintiff also voluntarily dismissed its claims against defendant Sam Hawgood, Chancellor of the University of California at San Francisco, on the grounds that the school “has neither a law school nor an undergraduate college.” The plaintiff continues to challenge the remaining defendants’ undergraduate and law school admissions practices.
Bridge, et al v. Oklahoma State Department of Education, No. 5:22-cv-00787, 24-6072 (10th Cir. 2025): Plaintiffs, three transgender students, filed a lawsuit on September 6, 2022 against a number of state and local agencies and Oklahoma government officials challenging Oklahoma SB 615, a school facilities law requiring all Pre-K through 12th grade public and public charter schools in the state to designate multiple occupancy restrooms at school for exclusive use of either male of female sex, as designated on the individual’s original birth certificate. The law also requires school district boards to adopt disciplinary policies for those that do not comply with the bathroom designations. It further exposes non-compliant schools to lawsuits by parents and requires the Oklahoma School Board to identify non-complaint schools and reduce their state funding. The district court dismissed Plaintiffs’ complaint. On April 19, 2024, Plaintiffs appealed to the 10th Circuit.
- Latest update: On November 20, 2025, a three-judge panel heard the parties’ arguments on appeal in the 10th Circuit. The arguments focused on whether recent U.S. Supreme Court cases, especially S. v. Skrmetti and Trump v. Orr, necessitated the conclusion that the challenged statute was lawful. In Skrmetti, the Supreme Court upheld a ban on gender-affirming care for minors in Tennessee, and in Orr, the Supreme Court granted an emergency application that permitted the U.S. Department of State to stop issuing passports that reflect a gender identity that differs from an individual’s sex at birth. The appellants argued that neither case is applicable, because Skrmetti addressed a law that turned on age, not sex or transgender status; and because Orr “was an emergency posture on an undeveloped record.”

5. Board of Director or Stockholder Actions:

State Board of Administration of Florida v. Target, No. 2:25-cv-00135 (M.D. Fla. 2025): On February 20, 2025 the State Board of Administration of Florida sued Target and certain Target officers on behalf of a class of Target stockholders, claiming the Target board of directors represented that it monitored social and political risk, when instead it allegedly focused only on risks associated with not achieving ESG and DEI goals. The plaintiff alleges that Target’s statements violated Sections 10(b),14(a), and 20(a) of the Securities Exchange Act of 1934 and that Target’s May 2023 Pride Month campaign triggered customer backlash and a boycott that depressed Target’s stock price. This suit relates to, and arises out of the same operative facts as, Craig v. Target Corp., No. 2:23-cv-00599-JLB-KCD (M.D. Fla. 2023). On July 24, 2025, the court consolidated the two cases.
- Latest update: On August 1, 2025 the defendants filed an omnibus motion to transfer the consolidated cases to the District of Minnesota. Among other points, the defendants argued that Minnesota is a more convenient forum for key non-party witnesses, the conduct at issue occurred in Minnesota, and Minnesota has a greater interest than Florida in deciding the cases. The plaintiffs filed a response, arguing that the defendants’ motion to transfer was wrong on the merits, untimely, and that the defendants’ motion should be denied because a motion to transfer had already been denied in Craig v. Target Corp. prior to consolidation. On September 9, 2025 the defendants reiterated their arguments in a reply and requested oral argument on the issue.

Legislative Updates:

California Senate Bill 253: On October 6, 2025, California Governor Gavin Newsom (D) signed Senate Bill 253 into law, amending the State Bar Act. Under existing law, the State Bar of California can offer discounts and benefits to active and inactive attorneys through insurance and noninsurance affinity programs. The State Bar Act regulates the distribution of revenue from these programs with a certain amount reserved for the California Lawyers Association or an affiliated 501(c)(3) organization to support their respective DEI, access to justice, and civic engagement efforts. Under Senate Bill 253, the California Lawyers Association or the affiliated 501(c)(3) organization must now submit an annual report to the California Legislature detailing its use of these funds and a statement of compliance with the State Bar Act’s prohibition on creating, operating, or soliciting members for affinity or royalty programs involving similar insurance or noninsurance products or services.

North Carolina House Bill 171 & Senate Bill 558: On July 3, 2025, North Carolina Governor Josh Stein (D) vetoed two bills aimed at eliminating and prohibiting DEI in state and local agencies and public higher education. House Bill 171 would eliminate DEI initiatives in state and local government and prohibit the use of any state or public funds to “promote, fund, implement, or maintain” DEI initiatives or programs. The bill would also subject any offending government officer or employee to civil penalties as well as potential removal from office or employment. Senate Bill 558 would prohibit public institutions of higher education from promoting or endorsing “divisive concepts” or requiring completion of courses related to “divisive concepts.” The bill employs a list of nonexclusive factors to define “divisive concepts,” including, but not limited to, the following concepts: “[a]n individual, solely by virtue of his or her race or sex, is inherently racist, sexist, or oppressive”; “[a]n individual, solely by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex”; “[t]he United States was created by members of a particular race or sex for the purpose of oppressing members of another race or sex”; and “[a] meritocracy is inherently racist or sexist.” On July 29, 2025, the North Carolina Senate overrode Governor Stein’s veto of Senate Bill 558. The North Carolina House of Representatives is scheduled to resume efforts to override both vetoes on December 15, 2025.

The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Zakiyyah Salim-Williams, Cynthia Chen McTernan, Anna McKenzie, Cate McCaffrey, Sameera Ripley, Anna Ziv, Emma Eisendrath, Benjamin Saul, Simon Moskovitz, Teddy Okechukwu, Beshoy Shokrolla, Angelle Henderson, Lauren Meyer, Kameron Mitchell, Taylor Bernstein, Jerry Blevins, Chelsea Clayton, Sonia Ghura, Samarah Jackson, Elvyz Morales, Allonna Nordhavn, and Felicia Reyes.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or the following practice leaders and authors:

Jason C. Schwartz – Partner & Co-Chair, Labor & Employment Group
Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)

Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)

Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, mdenerstein@gibsondunn.com)

Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, zswilliams@gibsondunn.com)

Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, msenger@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC announced the first-ever listed spot crypto trading on U.S. regulated exchange.

New Developments

Acting Chairman Pham Announces CFTC Interpretation to Unlock Over $22 Billion of Collateral and Promote American Competitiveness. On November 25, Chairman Caroline D. Pham announced that the CFTC’s Market Participants Division published an interpretation to clarify the circumstances under which a futures commission merchant may post customer-owned securities and securities purchased with customer funds with foreign brokers and foreign clearing organizations to margin customers’ foreign futures and foreign options positions in compliance with Part 30 of CFTC regulations. [NEW]

CFTC Staff Issues CPO No-Action Letter. On November 21, the CFTC’s Market Participants Division announced it has issued a no-action letter to the Structured Finance Association, in the context of qualifying credit risk transfer transactions engaged in by their member financial institutions, and certain commodity pool operator (CPO) requirements. [NEW]

U.S. Senate Agriculture Committee Advances CFTC Chair Nominee. On November 20, the U.S. Senate Committee on Agriculture, Nutrition, and Forestry advanced Michael Selig’s nomination to serve as Chairman and Commissioner of the CFTC to the full Senate for consideration.

CFTC to Resume Publishing COT Reports. On November 18, the CFTC announced that it would resume publishing Commitments of Traders (COT) reports on November 19 and released a schedule for the publication of reports that were interrupted during the lapse in federal government appropriations. According to the CFTC, the reports will be published in chronological order beginning November 19 at 3:30 p.m. (ET). The CFTC said that it will increase publication frequency allowing for the backlog to be cleared by the report scheduled for Jan. 23.

New Developments Outside the U.S.

ESAs Designate Critical ICT Third-Party Providers. On November 18, the European Supervisory Authorities published the list of designated critical information and communication technology (ICT) third-party providers under the Digital Operational Resilience Act.

ESMA Identifies Measures to Further Enhance Depositary Supervision. On November 17, ESMA published the results of a peer review that assessed the supervision of depositaries, in particular their oversight and safekeeping obligations. According to ESMA, the peer review found that the foundational frameworks for the supervision of depositaries are in place, but also found notable divergences across jurisdictions in terms of the depth and maturity of supervisory approaches.

New Industry-Led Developments

ISDA Responds to Bank of England on Gilt Market Resilience. On December 5, ISDA responded to the Bank of England’s discussion paper on gilt market resilience. In the response, ISDA encourages the Bank of England, before introducing any significant policy changes that would affect the functioning of the gilt repo market, to consider the prudential requirements on capital and liquidity in relation to repo transactions, in conjunction with monetary policy and financial stability, to avoid unintended and detrimental consequences for the UK gilt market and firms’ risk management practices. [NEW]

ISDA Responds to FCA on Progressing Fund Tokenization. On November 21, ISDA responded to the Financial Conduct Authority’s (FCA) consultation paper CP25/28 on progressing fund tokenization. In the response, ISDA focuses on the use of tokenized assets as both cleared and non-cleared derivatives collateral. Tokenization presents a significant opportunity in the derivatives market, improving risk management through the accelerated movement of collateral and is critical to facilitating 24/7 trading with sound risk management practices. [NEW]

ISDA Responds to CFTC Tokenized Collateral and Stablecoin Initiative. On November 21, ISDA responded to the CFTC’s request for input on the Tokenized Collateral and Stablecoin Initiative, offering perspectives on how tokenization and GENIUS Act–compliant payment stablecoins might contribute to more efficient and resilient collateral practices in derivatives markets. [NEW]

ISDA Publishes Paper Highlighting Changes in OTC IRD Markets. On November 20, ISDA published a paper highlighting changes in over-the-counter interest rate derivatives (IRD) markets between April 2022 and April 2025 based on data from the Bank for International Settlements (BIS) Triennial Central Bank Survey. ISDA said that global IRD average daily turnover rose by nearly 60% to $7.9 trillion in April 2025 from $5.0 trillion in April 2022, attributing the increase to strong growth in euro-denominated IRD trading.

ISDA Publishes Report Analyzing IRD Activity in Mainland China and Hong Kong. On November 19, ISDA published a report examining market growth, structure, and integration across onshore and offshore centers in mainland China and Hong Kong, with a particular focus on renminbi (RMB)-denominated IRD.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, Karin Thrasher, and Alice Wang*.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

*Alice Wang, a law clerk in the firm’s Washington, D.C. office, is not admitted to practice law.

In this webcast, we explore the key policy developments, enforcement risks, and latest case law shaping the future of federal contracting and grantmaking. The federal funding landscape has shifted dramatically in 2025 under the Trump administration. Executive orders targeting diversity, equity, and inclusion (DEI) initiatives, heightened scrutiny under the False Claims Act, and proposed regulatory changes are reshaping compliance obligations across sectors. These sweeping changes to federal funding policy have triggered a wave of contract and grant terminations that have landed squarely in the courts. Recent decisions – including Supreme Court rulings and conflicting circuit opinions – have complicated the path to relief, particularly for plaintiffs seeking equitable remedies like reinstatement of grants or contracts. From grant challenges to oversight of contractor conduct, understanding the evolving regulatory terrain is essential.

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PANELISTS:

Stuart F. Delery is a partner in Gibson Dunn’s Washington, D.C. office and a member of the firm’s Litigation, Crisis Management, and White Collar Defense & Investigations practice groups. He previously served as Acting Associate Attorney General of the United States, overseeing the civil and criminal work of multiple DOJ divisions, and now represents corporations and individuals in complex regulatory litigation and government investigations, including matters involving contractors and grant recipients.

Lindsay M. Paulin is a partner in Gibson Dunn’s Washington, D.C. office and Co-Chair of the firm’s Government Contracts practice. Her work spans the full lifecycle of government contracting issues—including internal investigations, bid protests, False Claims Act defense, cost-allowability disputes, suspension and debarment proceedings, and M&A involving federal contractors. She has represented clients in disputes before the United States Court of Appeals for the Federal Circuit, the United States Court of Federal Claims, the Boards of Contract Appeals, the United States Government Accountability Office, administrative agencies, and other federal and state courts.

Jake M. Shields is a partner in Gibson Dunn’s Washington, D.C. office and a member of the firm’s False Claims Act/Qui Tam Defense Practice Group. He is a seasoned FCA and white-collar defense attorney with deep experience in government enforcement, cybersecurity, and healthcare fraud matters. An expert in the FCA, Jake was a Senior Trial Counsel at the Fraud Section of the Civil Division of the DOJ, where, over an eight-year career spanning administrations of both major political parties, he investigated and litigated FCA cases on behalf of the federal government.

The National Highway Traffic Safety Administration released its proposed new corporate average fuel economy standards for light duty vehicles for model years 2022 through 2031. The proposal also aims to eliminate the manufacturer credit trading program, beginning with model year 2028.

On December 3, 2025, the National Highway Traffic Safety Administration (NHTSA) released a prepublication of its proposed new corporate average fuel economy (CAFE) standards for light duty vehicles for model years 2022 through 2031.[1] The proposal also includes several significant revisions to the CAFE program.

Key takeaways for regulated industry parties include:

NHTSA will no longer consider electric vehicles and the availability of compliance credits in proposing fuel economy standards. The new proposed model year 2022 baseline is 31.2 miles per gallon across the entire light-duty fleet (i.e., passenger cars and light trucks). The proposed rule includes gradual increases in fuel economy for subsequent model years, with NHTSA projecting that the amended standards would correspond to the industry fleetwide average of approximately 34.5 miles per gallon by model year 2031 for passenger cars and light trucks.
The proposed rule seeks to eliminate the inter-manufacturer credit trading program, beginning with model year 2028.
NHTSA’s proposal notes that, under the Energy Policy and Conservation Act (EPCA) preemption provision, states are preempted from adopting or enforcing any regulatory requirements related to fuel economy standards regardless of whether the Environmental Protection Agency (EPA) has granted waivers for such state programs under the Clean Air Act (CAA).

Second Trump Administration Fuel Economy Policy Changes

This proposed rule is one of many actions that the second Trump Administration has taken to reconsider the CAFE program.

On his first day in office, President Trump signed Executive Order 14154, “Unleashing American Energy,” where he announced policy goals of “removing regulatory barriers to motor vehicle access” and “ensuring a level regulatory playing field for consumer choice in vehicles.”[2]

U.S. Transportation Secretary Sean Duffy issued a memorandum implementing Executive Order 14154 on January 28, 2025, titled “Fixing the CAFE Program.”[3] In the memorandum, Secretary Duffy directed NHTSA to begin an immediate reconsideration of all fuel economy standards applicable to motor vehicles from model year 2022 and forward.

Congress also became involved in shaping a significant policy shift in fuel economy standards. President Trump’s signature second-term legislation, the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, eliminated all civil penalties for noncompliance with fuel economy standards.[4] Specifically, section 40006 of the OBBBA amends the language of the CAFE statute to reset the maximum civil penalty to $0.00.[5] Before this legislation, penalties were substantial, and they created a system of tradeable compliance credits so that companies that did not meet the standard could purchase credits from companies that exceeded the standards for a given model year. Now, after passage of the OBBBA, noncompliance with fuel economy standards no longer carries a penalty, effectively rendering the market for compliance credits a nullity.

On June 11, 2025, NHTSA issued an interpretive rule concluding that it is improper to consider the fuel economy of electric vehicles when determining the baseline for the fuel economy standards.[6]

NHTSA’s Proposed Rollback of Fuel Economy Standards

On December 3, 2025, NHTSA released a prepublication of its proposed new CAFE standards for light duty vehicles for model years 2022 through 2026 and model years 2027 through 2031.[7] The proposal also includes several significant revisions to the CAFE program.[8]

Proposed Fuel Economy Standards. Consistent with its prior June 2025 interpretive rule, NHTSA proposes that the fuel economy standards be formulated based only on the fuel economy performance of light-duty vehicles powered by gasoline and diesel fuels. The agency will no longer consider the performance of electric vehicles and plug-in hybrid electric vehicles in its standard-setting analysis, as well as the impact of compliance credits.

NHTSA concludes that it is not permitted under the CAFE statute to consider electric vehicle performance or credit availability in setting standards, noting that it has a “statutory obligation to set CAFE standards at the maximum feasible level that the agency determines vehicle manufacturers can achieve in each model year, balancing four key factors: technological feasibility, economic practicability, the need of the Nation to conserve energy, and the effect of other Federal regulations on fuel economy.”[9] But it asserts that “fuel economy standards are designed based on light-duty vehicles powered by ‘fuel,’ which is defined in EPCA to include gasoline, diesel fuel, or other liquid or gaseous fuels with similar combustion properties as identified by NHTSA.”[10]

From a policy perspective, the agency also notes that the large fuel economy values assigned to electric vehicles have “significantly increas[ed] the fuel economy requirements for traditional gasoline- or diesel-fueled fleets.”[11]

NHTSA also proposes to remove the consideration of the impact of certain technologies, such as air conditioner efficiency, in setting the standards because those technologies are “not demanded by consumers” and have “questionable fuel economy benefits.”[12]

The proposed standards also seek to alter the relationship between the footprint of vehicles—the rectangular area of a vehicle measured from tire to tire where the tires hit the ground—and fuel economy standards.[13] NHTSA points out that the relationship between footprint and fuel economy has shifted substantially since it was last calculated for model year 2008.[14] Although NHTSA will continue applying an estimated relationship that sets more stringent targets for smaller footprint vehicles and less stringent targets for larger footprint vehicles, this proposed change could have implications for the relative incentive to manufacture larger footprint vehicles.

NHTSA ultimately proposes resetting the model year 2022 baseline for passenger cars at 36 miles per gallon and light trucks at 27.7 miles per gallon, excluding the large fuel economy standards previously assigned to electric vehicles.[15] The new proposed model year 2022 baseline is 31.2 miles per gallon across the entire light-duty fleet.[16] Fuel economy standards would then increase at a rate of 0.5 percent per year between model year 2022 and model year 2026, followed by an increase at a rate of 0.25 percent per year from model year 2027 through model year 2031. NHTSA projects that the amended standards would correspond to the industry fleetwide average of approximately 34.5 miles per gallon in model year 2031 for passenger cars and light trucks.

Proposed Changes to the CAFE Program. In addition to the proposed overhaul of the fuel economy standards, the agency proposes other significant revisions to the CAFE program.

First, the proposal seeks to eliminate the manufacturer compliance credit trading program.[17] Although the OBBBA zeroed out the civil penalties for noncompliance with CAFE standards, effectively eliminating the value of credits and significantly slowing the trading market, this proposed change would formally eliminate any market for credit exchanges.[18] The agency notes that this elimination will “encourage manufacturers to provide for steady improvement in fuel economy across their fleets over time, as opposed to relying upon credits acquired from third-party [electric vehicle] manufacturers.”[19] However, because “manufacturers have made investments in particular compliance pathways—pathways that may include purchasing credits from other manufacturers even though the availability of those credits is uncertain”—the agency proposes that the elimination of credit trading not begin until model year 2028.[20]

Second, NHTSA also proposes changes to the criteria used to determine if vehicles are passenger cars or light trucks. The agency points out that “separate standards for the passenger car and light truck fleets . . . have led manufacturers to reshape the market in unanticipated ways—such as by almost eliminating the production of station wagons (passenger cars that generally have more robust cargo capacity, adding mass and reducing fuel economy) in favor of vehicles like minivans and crossover utility vehicles (considered light trucks, and subject to less stringent standards).”[21] In 1975, light trucks represented only 19.3 percent of the light-duty vehicle market, and today they represent 64.7 percent of the light-duty vehicle market.[22]

In recognition of this shift, NHTSA proposes to alter what counts as a light truck. For example, one consideration in assessing if a vehicle qualifies as a light truck is ground clearance level.[23] NHTSA finds that manufacturers have started applying high ground clearance characteristics (such as breakover angle and running clearance) to vehicles that are not otherwise intended for off-highway operation. In response to this shift in vehicle design, NHTSA proposes to eliminate axle clearance as a characteristic used to define a vehicle with high ground clearance beginning in model year 2028.[24]

Preemption. NHTSA’s proposal also notes that EPCA includes a “blanket preemption provision”[25] pursuant to which “states may not adopt or enforce regulatory requirements related to fuel economy standards.”[26] NHTSA points out that the preemptive effect “holds true regardless of whether EPA has granted waivers for emissions requirements under the CAA.”[27]

The proposal notes that President Trump signed into law three joint resolutions, adopted by Congress under the Congressional Review Act, that disapproved waivers that EPA granted under CAA section 209.[28] But NHTSA’s view is that, even if these CAA waivers were in place, the existence of those waivers would not waive EPCA preemption.

However, NHTSA states that it is not taking formal action regarding preemption in the proposal.

The proposal will be open to comments for 45 days after publication in the Federal Register.

[1] National Highway Traffic Safety Administration, The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks, Prepublication Version (Dec. 3, 2025), here.

[2] Exec. Order No. 14,154, 90 Fed. Reg. 8353 (Jan. 29, 2025).

[3] Fixing the CAFE Program, Memorandum from Sean Duffy, the Secretary of Transportation, to the Office of the Administrator of the National Highway Traffic Safety Administration (Jan. 28, 2025).

[4] One Big Beautiful Bill Act, Pub. L. No. 119-21, § 40006, 139 Stat. 72, 136 (2025) (codified at 49 U.S.C. § 32912).

[5] Id.

[6] National Highway Traffic Safety Administration, Resetting the Corporate Average Fuel Economy Program, 90 Fed. Reg. 24518 (Jun. 11, 2025).

[7] National Highway Traffic Safety Administration, The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks, Prepublication Version (Dec. 3, 2025), here.

[8] Id. at 1.

[9] Id. at 17.

[10] Id. at 300.

[11] Id. at 15.

[12] Id. at 18.

[13] Id. at 23.

[14] Id.

[15] Id. at 24.

[16] Id.

[17] Id. at 398.

[18] On July 25, 2025, NHTSA sent a letter to manufacturers indicating that it would not be issuing compliance notifications for credits generated in model years 2022 and later, but that it “anticipates” reissuing compliance notifications after completion of its rulemaking implementing OBBB. In the meantime, companies have not been able to finalize credit transactions because NHTSA will not honor credit transfers until the corresponding credits are added to the manufacturer’s account, which cannot be done until NHTSA issues a compliance notification. NHTSA does not explain in its proposal whether or when it will begin issuing credit compliance notification letters for credits generated between model years 2022 and 2028.

[19] Id. at 19.

[20] Id.

[21] National Highway Traffic Safety Administration, The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks, Prepublication Version (Dec. 3, 2025), at 14, here.

[22] Id. at 382.

[23] Id. at 385–86.

[24] Id. at 386.

[25] Id. at 315.

[26] Id.

[27] Id.

[28] H.J. Res. 87 (Pub. L. 119-15); H.J. Res. 88 (Pub. L. 119-16); H.J. Res. 89 (Pub. L. 119-17); see also The White House, Statement by the President, Last revised: June 12, 2025, available at: https://www.whitehouse.gov/briefingsstatements/2025/06/statement-by-the-president/ (accessed: Sept. 10, 2025).

The following Gibson Dunn lawyers prepared this update: Stacie Fletcher, Rachel Levick, Veronica Goodson, and Laura Stanley.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Environmental Litigation and Mass Tort practice group:

Stacie B. Fletcher – Washington, D.C. (+1 202.887.3627, sfletcher@gibsondunn.com)

Rachel Levick – Washington, D.C. (+1 202.887.3574, rlevick@gibsondunn.com)

New simplified ESRS introduce reductions in data requirements, streamlined materiality assessments, and enhanced alignment with global sustainability standards.

On December 3, 2025, the European Financial Reporting Advisory Group (EFRAG) has released its draft simplified European Sustainability Reporting Standards (ESRS)[1] together with its final technical advice[2] to the European Commission, building on its Exposure Draft[3] published on July 31, 2025. This development marks an important step in the European Commission’s 2025 Sustainability Omnibus initiative, which aims to streamline regulatory obligations and reduce compliance burdens without compromising the fundamental objective of the Green Deal to advance sustainability in the European Union.[4]

The Commission indicated that it intends to review the draft and prepare its Delegated Act revising the original ESRS in the first half of 2026, with the applicability date of the new ESRS to be confirmed in the delegated act. The introductory wording in Delegated Regulation (EU) 2025/1416 seems to suggest that the revised standards will only start to apply for the reporting period of financial year 2027.

Key Simplifications and Reforms

EFRAG’s draft simplified ESRS introduce a series of structural and substantive changes intended to make sustainability reporting more proportionate and practical as well as increasing interoperability with other reporting standards such as ISSB:

Stronger Emphasis on Usefulness of Information

A new overarching principle allows companies to filter disclosures through a “usefulness and fair presentation” lens (similar to requirements in the IFRS and ISSB standards), reducing compliance-driven reporting and emphasizing information that is genuinely relevant to investors and other users.

Simplified Materiality Assessment

The materiality process – cited as one of the most complex elements of the first-year reporting cycle – has been streamlined with:

Clearer guidance, more flexibility and more practical instructions,
Reduced documentation requirements, and
Better alignment with auditor expectations.

These changes aim to limit administrative burden while preserving robust decision-making and a “balanced consideration of the costs”.

Reduced Value Chain Burden

The prior preference for direct data collection from value chain partners has been deleted. Companies may now rely more broadly on estimates and indirect sources, alleviating pressure to obtain granular upstream and downstream data.

Substantial Reliefs and Phasing-In Measures

Similarly to the extension of phase-ins for so-called wave 1 companies (i.e. companies being required to report already starting with financial year 2024) under the European Commission’s “quick fix” Delegated Regulation (EU) 2025/1416, the simplified standards incorporate a wider array of phase-ins and “undue cost”-exemptions for disclosures that have proven operationally challenging, such as ESRS S2 or S3.

More Principles-Based Narrative Reporting

Policies, actions, and targets may now be described in a more flexible, narrative manner, with companies free to determine how best to structure these disclosures.

Fewer and Clearer Requirements

According to EFRAG, mandatory datapoints have been reduced in the simplified ESRS by 61 %, and all voluntary datapoints have been removed, making the standards shorter, more accessible, and more coherent.

Improved Interoperability With ISSB Standards

EFRAG has preserved common disclosure elements where possible and further aligned ESRS with ISSB Standards (including adjustments for GHG boundaries and anticipated financial effects). However, some ESRS reliefs go beyond what ISSB permits; companies intending to assert both ESRS and ISSB compliance should evaluate the implications carefully.

Next Steps and Applicability Considerations

The European Commission will now prepare its Delegated Act incorporating EFRAG’s technical advice. The European Commission can do so unilaterally, with the delegated act being subject to a two months’ scrutiny period by the European Parliament and Council of the EU after publication. The introductory wording in the European Commission’s “quick fix” Delegated Regulation (EU) 2025/1416 seems to suggest that the revised standards will only start to apply for the reporting period of financial year 2027.

What This Means for Companies

Companies already subject to CSRD, i.e. so-called wave 1 companies, should carefully monitor the publication of the European Commission’s Delegated Act in the upcoming months, in particular with regard to its application date.

Large EU subsidiaries of U.S. and other non-EU companies, so-called wave 2 companies, generally due to report in 2028 for financial year 2027, should begin to assess how the simplified ESRS may affect their reporting strategy and internal processes. Although the simplifications reduce the reporting obligations, companies will still need to maintain robust materiality assessments, governance structures, and data systems to ensure reliable, audit-ready sustainability disclosures.

Companies aligning with both ESRS and ISSB frameworks should pay particular attention to areas where reliefs under the simplified ESRS may create divergence.

[1] See https://www.efrag.org/en/draft-simplified-esrs (last accessed on December 4, 2025).

[2] See here (last accessed on December 4, 2025).

[3] See https://www.efrag.org/en/projects/esrs-simplification (last accessed on December 4, 2025).

[4] We regularly report on the latest Omnibus Simplification developments in our monthly ESG: Risk, Litigation, and Reporting Update.

The following Gibson Dunn lawyers prepared this update: Ferdinand Fromholzer, Carla Baum, Johannes Reul, Babette Milz, and Vanessa Ludwig

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s ESG: Risk, Litigation, and Reporting practice group, or the authors: :

Ferdinand Fromholzer – Munich (+49 89 189 33-270, ffromholzer@gibsondunn.com)

Carla Baum – Munich (+49 89 189 33-263, cbaum@gibsondunn.com)

Johannes Reul – Munich (+49 89 189 33-272, jreul@gibsondunn.com)

Babette Milz – Munich (+49 89 189 33-283, bmilz@gibsondunn.com)

Vanessa Ludwig – Frankfurt (+49 69 247 411 531, vludwig@gibsondunn.com)

Join us for a recorded webinar that explores the current state of play in U.S. Attorneys’ Offices, including pending challenges to the appointment process of certain U.S. Attorneys and the ramifications of such challenges, changing Department of Justice and U.S. Attorney enforcement priorities, and successful strategies for escalating cases up the chain both within and outside the DOJ.

MCLE CREDIT INFORMATION:

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour.

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PANELISTS:

Nicola (Nick) T. Hanna is a partner in Gibson Dunn’s Los Angeles office and Co-Chair of the firm’s White Collar Defense and Investigations Practice Group. He represents Fortune 500 companies and executives in high-stakes civil litigation, white collar crime, and regulatory and securities enforcement – including internal investigations, False Claims Act cases, and compliance counseling. A former United States Attorney for the Central District of California, Nick draws on his extensive government and trial experience to advise boards and senior executives in matters involving the DOJ, SEC, and other enforcement agencies.

Douglas Fuchs is a partner in Gibson Dunn’s Los Angeles office and Co-Chair of the firm’s Los Angeles Litigation Department. He represents clients in white-collar and regulatory enforcement matters—including securities fraud, public corruption, antitrust, and FCPA issues—conducts internal investigations, develops compliance programs, and handles complex civil litigation arising from related criminal or regulatory actions Prior to joining the firm, Doug was an Assistant U.S. Attorney for the Central District of California for seven years, and served as Deputy Chief of the Major Frauds Section.

Debra Wong Yang is a partner in Gibson Dunn’s Los Angeles office and Chair of the firm’s Crisis Management Practice Group. Debra has a strong background in addressing and resolving problems across the white collar litigation spectrum, including through corporate and individual representations, internal investigations, crisis management and compliance. She previously served as the U.S. Attorney for the Central District of California, where she led significant criminal prosecutions and enforcement initiatives.

This update discusses arguments that district courts have found compelling in dismissing these cases, as well as recommendations for plan sponsors and fiduciaries to manage litigation risk.

Over the last eighteen months, class action lawsuits challenging the use of ERISA 401(k) plan forfeitures to offset employer contributions have proliferated in the federal courts. Although this use of forfeitures is a longstanding practice recognized by the U.S. Department of Treasury, a handful of favorable district court decisions allowing such claims to proceed to discovery have apparently emboldened plaintiffs to challenge this practice. Fortunately for defendants, recent cases have suggested a growing skepticism of this theory, with most district courts granting motions to dismiss. A few of these decisions are now pending review in the Third, Eighth, and Ninth Circuit Courts of Appeals.

In this update, we provide an overview of arguments that district courts have found compelling in dismissing these cases, as well as recommendations for plan sponsors and fiduciaries to manage litigation risk.

Background on ERISA Plan Forfeitures

The forfeitures in the crosshairs in these lawsuits are unvested employer contributions to plan accounts that are forfeited by the employee participant when the employee separates from the company before becoming fully vested in the funds. To illustrate, an employer might commit to matching its employees’ 401(k) contributions up to 4% of covered compensation, while requiring that the employees complete three years of service before the contributions vest. If an employee leaves her job before completing three years of service, she would forfeit these matching funds. Plan terms may spell out how such forfeited funds are to be used, typically for paying plan expenses, offsetting future employer contributions, or increasing benefits to other participants’ accounts. Plan sponsors may also include plan language specifying that forfeitures be used for only one of these purposes.

Forfeiture lawsuits generally allege that the use of forfeitures to offset future employer contributions—rather than to pay plan expenses otherwise borne by plan participants or to reallocate to other eligible plan participants—prioritizes the plan sponsor’s financial interests over those of plan participants and therefore violates ERISA. Specifically, plaintiffs allege that this practice (1) violates fiduciary duties of loyalty and prudence owed to the plan; (2) violates ERISA’s anti-inurement provision; and (3) constitutes a prohibited transaction under ERISA.

As we reported previously, early decisions were split on the viability of plaintiffs’ theory. However, over the last year, an increasing number of courts have rejected these cases at the motion-to-dismiss stage. In fact, of twenty-eight recently filed suits, courts have granted defendants’ motions to dismiss in twenty-four of them. And fourteen of these twenty-four suits were dismissed partially or entirely without leave to amend. While these dismissals are welcome news for plan sponsors, these cases are still in their infancy, and a few are currently on appeal. Until the circuit courts weigh in, the threat of litigation still looms.

The Key Arguments for Defendants in Refuting Plaintiffs’ Forfeiture Claims

As noted above, to date, most forfeiture cases have failed at the pleadings stage. Defendants have made an array of jurisdictional and merits arguments in motions to dismiss challenging plaintiffs’ theories. While factual differences between plan terms have influenced the outcome of several cases, certain merits arguments have consistently gained traction in the courts.

Plaintiffs’ Central Theory of Fiduciary Breach Is Often Deemed Overbroad

Plaintiffs’ foundational argument is that employers breach fiduciary duties when they use forfeited funds to offset company contributions rather than pay plan expenses otherwise paid by plan participants. Such a move, plaintiffs argue, necessarily amounts to a breach of the duties of prudence and loyalty owed by plan fiduciaries under ERISA.

While a few courts have accepted this theory, the bulk have not, finding that the claims are overbroad and insufficient under Federal Rule 12(b)(6). Courts reason that ERISA does not require fiduciaries to “maximize pecuniary benefits” or “resolve every issue of interpretation in favor of plan beneficiaries.”[1] These decisions often note that defendants’ actions were permitted by—or even required by—the terms of their plan documents. As an example, a district court judge, confronted with a plan that explicitly allowed its sponsor “to use forfeited funds as company contributions or administrative expenses,” stressed that plaintiffs were essentially asking the court to read a new benefit into their plan’s own terms: “paying [p]laintiffs’ administrative costs.”[2] Framing that interpretation as “impermissibl[e],” the judge went on to dismiss plaintiffs’ breach of fiduciary duty claim.

Some judges also point out that the use of forfeitures to offset company contributions (where permitted by plan terms) is recognized under a Treasury Department regulation in the defined benefit context, as well as under proposed regulations in the defined contribution context.[3]

Accordingly, district courts are increasingly rejecting plaintiffs’ arguments that defendants should be categorically precluded from taking an action that the plan itself permits. As one district court noted, plaintiffs must “plead something more than an ordinary use of forfeited funds to pay future employer contributions, or in other words, behavior that is not consistent with the practices of perhaps all 401(k) plan fiduciaries.”[4]

District Courts Are Not Buying Plaintiffs’ Prohibited Transaction and Anti-Inurement Claims

Plaintiffs’ class action complaints also typically allege that using forfeitures to offset company contributions violates both ERISA’s anti-inurement and prohibited transactions provisions. Regarding the anti-inurement provision, plaintiffs claim that the use of forfeitures to offset company contributions effectively “inures” plan assets to the benefit of the employer, rather than the plan participants. Additionally, plaintiffs argue that this practice constitutes a prohibited transaction because it amounts to self-dealing by reducing the contributions an employer must make to that plan.

Neither argument has been particularly persuasive to the courts. Only two of the earliest motion to dismiss opinions permitted prohibited transaction and anti-inurement claims to proceed: Qualcomm and Intuit.[5] Most district courts to address these claims have dismissed them. Courts emphasize that to state a claim for violation of the anti-inurement provision, plaintiffs must allege that plan assets reverted back to the plan sponsor.[6] However, forfeited funds remain in the plan when used to offset company contributions and thus plaintiffs cannot allege that any plan assets reverted back to the plan sponsor.[7] The fact that plan sponsors benefit “through the reduction in [their] matching contributions does not make the use of forfeited amounts in this way a violation of the anti-inurement provision.”[8]

As for prohibited transaction claims, district courts consistently hold that the reallocation of forfeited funds within a plan—including to offset company contributions—does not constitute a “transaction” as that term is used in Sections 406(a) or 406(b) of ERISA. The transactions prohibited by these provisions are typically “commercial bargains that present a special risk of plan underfunding,” for example credit extensions, not simply a reallocation of funds within a plan between purposes.[9] Thus, these claims also fail.[10]

Forfeiture Cases Pending Appeal

Although most district courts presented with 401(k) forfeiture claims are now disposing of them on motions to dismiss, courts of appeal have yet to address the matter. Multiple dismissal decisions are pending on appeal, however, with appellate briefing complete in one case and underway in five others—actions that cumulatively touch the Third, Eighth, and Ninth Circuits.[11] Opinions issued in these cases in the coming months will likely influence the direction of future district court decisions and—if favorable to defendants—could substantially narrow the opportunities for viable 401(k) forfeiture lawsuits.

Future Considerations for Plan Sponsors and Fiduciaries

These cases are facing significant headwinds, which may make them less appealing for plaintiffs. Nevertheless, with some cases still allowed to proceed to discovery, and no appellate decisions yet issued in this space, the law remains to be fully written. For now, sponsors and fiduciaries should anticipate more cases on the horizon.

While this wave of litigation continues, sponsors may want to consider reviewing their plan documents to assess whether their uses of forfeitures comply with IRS guidance and proposed Treasury Department regulations, as well as with the terms of their plans.[12] Fiduciaries may also consider documenting any decision-making related to their use of forfeitures, including detailing their compliance with plan terms. They may also review participant communications, such as the summary plan description, to assess how forfeiture allocations are explained to plan participants.

[1] Wright v. JPMorgan Chase & Co., 2025 WL 1683642, at *5 (C.D. Cal. June 13, 2025) (quoting Wright v. Oregon Metallurgical Corp., 360 F.3d 1090, 1100 (9th Cir. 2004)).

[2] Middleton v. Amentum Parent Holdings, LLC, 2025 WL 2229959, at *14-15 (D. Kan. Aug. 5, 2025).

[3] Polanco v. WPP Group USA, Inc., 2025 WL 3003060, at *4-5 (S.D.N.Y. Oct. 27, 2025) (quoting 26 C.F.R. § 1.401-7(a)); Hutchins v. HP Inc., 737 F. Supp. 3d 851, 863-64 (N.D. Cal. 2024).

[4] McWashington v. Nordstrom, Inc., 2025 WL 1736765, at *14 (W.D. Wash. June 23, 2025).

[5] Perez-Cruet v. Qualcomm Inc., 2024 WL 2702207, at *3-7 (S.D. Cal. May 24, 2024), reconsideration denied, 2024 WL 3798391 (S.D. Cal. Aug. 12, 2024); Rodriguez v. Intuit Inc., 744 F. Supp. 3d 935, 946-49 (N.D. Cal. 2024).

[6] E.g., Hutchins, 737 F. Supp. 3d at 865-66 (N.D. Cal. 2024).

[7] See e.g., Fumich v. Novo Nordisk Inc., 2025 WL 2399134, at *8 (D.N.J. Aug. 19, 2025); Barragan v. Honeywell Int’l Inc., 2024 WL 5165330, at *5-6 (D.N.J. Dec. 19, 2024); Hutchins, 737 F. Supp. 3d at 868 (N.D. Cal. 2024) (same); Dimou v. Thermo Fisher Scientific Inc., 2024 WL 4508450 at *10 (S.D. Cal. Sept. 19, 2024) (same).

[8] Hutchins, 737 F. Supp. 3d at 866 (N.D. Cal. 2024).

[9] Barragan, 2024 WL 5165330, at *7 (D.N.J. Dec. 19, 2024) (internal citation omitted).

[10] Sievert v. Knight-Swift Transportation Holdings, Inc., 780 F. Supp. 3d 870, 880 (D. Ariz. 2025); Barragan, 2024 WL 5165330, at *7 (dismissing prohibited transaction claim because “the allegations demonstrate that the forfeited amounts remain as Plan assets and are reallocated to other Plan participants”); Hutchins, 737 F. Supp. 3d at 868 (same); Dimou, 2024 WL 4508450 at *11 (same).

[11] Hutchins, 767 F. Supp. 3d 912 (N.D. Cal. 2025), appellate briefing completed, No. 25-826 (9th Cir.); JPMorgan Chase, 2025 WL 1683642 (C.D. Cal. June 13, 2025), briefing underway, No. 25-4235 (9th Cir.); McWashington, 2025 WL 1736765 (W.D. Wash. June 23, 2025), briefing underway, No. 25-4613 (9th Cir.); Barragan, 2025 WL 2383652 (D.N.J. Aug. 18, 2025), briefing underway, No. 25-2609 (3d. Cir.); Cain v. Siemens Corp, 2025 WL 2172684 (D.N.J. July 31, 2025), briefing underway, No. 25-2564 (3d. Cir.); Matula v. Wells Fargo & Co., 2025 WL 1707878 (D. Minn. June 18, 2025), briefing underway, No. 25-2441 (8th Cir.).

[12] Use of Forfeitures in Qualified Retirement Plans, 88 FR 12282-01.

The following Gibson Dunn lawyers prepared this update: Ashley Johnson, Jennafer Tryck, Laura Lashus, and Wyatt Hayden.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s ERISA Litigation, Labor & Employment, or Executive Compensation & Employee Benefits practice groups:

ERISA Litigation:
Karl G. Nelson – Dallas (+1 214.698.3203, knelson@gibsondunn.com)
Ashley E. Johnson – Dallas (+1 214.698.3111, ajohnson@gibsondunn.com)
Heather L. Richardson – Los Angeles (+1 213.229.7409, hrichardson@gibsondunn.com)
Jennafer M. Tryck – Orange County (+1 949.451.4089, jtryck@gibsondunn.com)

Labor & Employment:
Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Los Angeles (+1 213.229.7107, ksmith@gibsondunn.com)

Executive Compensation & Employee Benefits:
Michael J. Collins – Washington, D.C. (+1 202.887.3551, mcollins@gibsondunn.com)
Sean C. Feller – Los Angeles (+1 310.551.8746, sfeller@gibsondunn.com)
Krista Hanvey – Dallas (+1 214.698.3425, khanvey@gibsondunn.com)

‘Tis the Christmas auction season – the other bidder is behind you!’

AIM traded Inspecs Group announced on 20 November that it is now juggling indicative offers from: H2 Equity partners; a consortium comprising Risk Capital Partners and Ian Livingston; and Safilo Group. The PUSU deadline for all three has been extended to 18 December 2025. It also told the audience (and the other actors) that the highest proposal is currently from H2 – which is a cash offer with an unlisted share alternative.
Cometh (not quite midnight on) the third PUSU deadline on 7 November for JTC suitors Permira and Warburg Pincus, and JTC (Cinderella) was in receipt of proposals from each at an equivalent offer price and where both had completed due diligence; agreed the form of transaction documentation; and wanted to move to make a firm offer asap. Permira ultimately got the nod with a further revised proposal which led to it announcing a recommended all cash offer on 10 November which values JTC at approximately £2.3 billion on a fully diluted basis.
To round out the show Bluefield Solar Income Fund Limited (main market), PPHE Hotel Group (main market), Kore Potash plc (AIM) and Management Consulting Group plc (delisted) all announced formal sale processes.

The November Data

Offers Announced

Offers by Sector (YTD)

Bid Premia	Financial Advisor Fees (% deal value)

What’s Happened

BHP no longer in ore of Anglo – talks off

BHP never wanted the deeds to a platinum mine for Christmas. The demerger of Anglo Platinum was a condition (together with the parallel demerger of Kumba Iron Ore) to its £38.6 billion indicative proposal put to the Anglo American board in April last year. Anglo cited the implementation risk of an unprecedented two public company spin outs as one of the reasons for not taking discussions further. But with (now renamed) Valterra Platinum successfully spun-out in June (and ignoring for a moment Anglo’s announced merger with Teck Resources), there were thoughts as to whether this could be another “boomerang” return deal, similar to compatriot Macquarie’s acquisition of Renewi.

In 2023, Macquarie (like BHP) came up against the hard edges of the PUSU regime in its initial approach to Renewi but, together with British Columbia Investment Management, successfully revived/“recycled” that transaction in June this year. However, last week BHP announced that following preliminary discussions with Anglo it is no longer considering an approach. Although BHP may have to consider what to do about its long-standing investment in Solgold, with Solgold announcing earlier in the week that it had received a non-binding proposal from its largest shareholder Jiangxi Copper Company. JCC currently has a festive PUSU deadline of 26 December.

Just not cricket! They play by different rules Down Under

Australian public M&A has a new pantomime villain (not the English cricket team). Back in February, Cosette Pharmaceuticals Inc. announced a recommended scheme of arrangement for Mayne Pharma. Two months later Mayne put out a profit downgrade. Cosette attempted to rely on a MAC condition to back out, but was ultimately denied. It also announced that, if the deal still went through, it would close one of Mayne’s plants in South Australia. The scheme was conditional on Australian foreign investment approval and the plant closure was seen by some as gaming that approval. Last month, to the disappointment of Mayne shareholders, the Australian Treasurer declined to approve the deal (there having been a separate debate about what would happen if it was approved but subject to conditions).

The UK has very different rules on MACs (with a notoriously high hurdle of “striking at the heart of the purpose of the transaction”); it is also not possible to invoke a regulatory condition without Panel approval; and the Code requires a bidder to set out its intentions for the target business and employees in detail in the offer announcement and documentation. However, in the case of a regulatory approval, without which it is almost impossible to proceed, and which is refused, would the ultimate outcome be different? The UK rules would hopefully never have let the genie out of the bottle in the first place.

Pens down, tools down on HICL Infrastructure and TRIG merger

Another bidder with a change of heart is HICL. On 17 November, HICL Infrastructure and The Renewables Infrastructure Group Limited announced an agreed merger to create the UK’s largest listed infrastructure company with net assets of £5.3 billion. Despite both being FTSE 250 companies, and it being one of the larger announced transactions of the year, it is not covered by the Code as it involved the reconstruction and voluntary winding up of TRIG under Guernsey law. This has proved pivotal. After reported feedback from HICL shareholders, the parties announced earlier this week that the merger is off. Something which would not have been possible under the Code (without the express consent of the Panel). HICL stated that it could not progress the transaction without a substantial majority of support from its investors. HICL shares jumped more than 4% on the news.

Looking Ahead

Predictions for December:

Will the ghosts of schemes past come back to haunt Cicor’s bid for TT Electronics?

At the end of October, Six Swiss listed Cicor Technologies announced a recommended cash and share offer for TT Electronics. There would appear to have been shareholder feedback on the Swiss share component, as on 18 November Cicor announced a revised final all cash offer (with an optional only share alternative). Cicor should then have been able to sleep better with an equity raise planned post the shareholder vote to pay down the resulting additional borrowings. However, the day after, significant shareholder DBAY Advisors (which came out against the deal when it originally broke and which itself had previously put proposals to the TT board), disclosed that it had increased its shareholding from 16% to over 24%.

Last month saw the unusual event of the scheme of arrangement for Natara’s offer for Treatt being voted down by Treatt shareholders (with Döhler amassing a 28% blocking stake). It will be interesting to see what is unwrapped at the TT shareholder meeting scheduled for the week before Christmas.

P2P Financing

The most significant debt financing backing a public to private bid in November was the £1.5 billion private credit facility provided to support Permira’s acquisition of funds administration and services provide JTC plc in a deal that values the target at £2.3 billion. The financing is led by Blackstone and other lenders include CVC Credit, Singapore’s GIC, Oak Hill, Blue Owl, PSP Investments and Jefferies. The debt will consist of £1.3 billion worth of senior term loans (split into sterling, euro and dollar tranches) to fund the acquisition and refinancing of target debt, as well as a £250 million delayed draw term loan and a £150 million bridge to a revolving credit facility.

The documentation disclosed in connection with the bid assumes a financing EBITDA of £160 million (subject to final structuring analysis) indicating that leverage through the drawn term loan exceeds 8x. This is higher than the leverage usually available for broadly syndicated deals, proving once again the importance of the private credit space to fund competitive bids for acquisitions.

Another feature distinguishing private credit facilities from syndicated loans is the availability of PIK toggles, allowing borrowers to reduce the burden of cash pay interest in difficult markets. The JTC plc financing documents give the borrower an option to capitalise up to 50% of the margin on its term loans (at a sliding scale premium rate capped at 0.25%) for a period of up to three years during the life of the loans.

However, perhaps the most notable term of these facilities is the pricing. The sterling and euro facilities are priced at 4.75% over the respective reference rates, whilst the dollar tranche is priced at 4.50% and further margin step downs are available beginning 6 months after closing. This is very close to the levels of pricing recently seen on broadly syndicated loans for new acquisitions and shows that, for deals with a strong credit story, private credit now provides a welcome alternative liquidity source for bidders, with the ability to absorb larger deals without a huge pricing premium.

Equity Capital Markets

After several London main market IPOs in September and October (The Beauty Tech Group, Shawbrook and Princes Group), no main market IPOs were announced in November, reflecting in part the usual slow-down in IPO activity following the expiry of the 135-day negative assurance accounting comfort period for issuers with a 31 December year end, going to market on the back of 30 June interim numbers. The most notable primary ECM transaction in November was a capital raise by SSE.

SSE Placing

On 12 November, energy utility SSE announced, pre-market open, an equity raise of approximately £2 billion as part of its £33 billion investment programme for FY26-30. This represented the second largest equity raise by a company on the LSE in the past five years after the £7 billion rights issue by National Grid in May 2024. The equity raise amounted to approximately 8.8% of SSE’s existing issued share capital and included an approximately £2 billion institutional placing (on a “soft” pre-emptive basis), alongside an £8 million retail offer conducted via RetailBook and a £330,000 director subscription. In total, 97,916,637 new shares were issued at a price of 2,050 pence per share, reflecting a 3.8% premium to the closing price on 11 November. The equity raise was well received by the market with the share price increasing to 2,307 pence at market close on 12 November.

Key Contacts:

Will McDonald Partner, Corporate	Chris Haynes Partner, Corporate	David Irvine Partner, Finance	Kavita Davis Partner, Finance
James Addison Of Counsel, Corporate	Thomas Barker Of Counsel, Corporate	Sarah Leiper-Jennings Of Counsel, Corporate	Pete Usher Associate, Corporate

With the launch of the new U.S. Department of Justice/Department of Homeland Security cross-agency Trade Fraud Task Force, importers and their affiliates are at heightened risk of criminal and civil enforcement actions for alleged violations of tariffs, duties, and import restrictions. In this recorded webinar, we explore the theories of criminal prosecution the DOJ has used in the past to prosecute tariff evasion, the investigative tools they might employ, scenarios that are most likely to attract regulatory scrutiny, and the steps companies can take to mitigate their risk of enforcement.

MCLE CREDIT INFORMATION:

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Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

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California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

PANELISTS:

Christopher (Chris) T. Timura is a partner in Gibson Dunn’s Washington, D.C. office and a member of the International Trade and White Collar Defense & Investigations Practice Groups. He advises clients on complex matters at the intersection of U.S. national security, foreign policy and international trade regulation — including export controls, economic sanctions, and import-related investigations — and regularly represents companies before agencies such as the OFAC, BIS and CBP. Chris currently serves on the Department of Commerce’s Regulations and Procedures Technical Advisory Committee.

We are pleased to provide you with the November edition of Gibson Dunn’s monthly U.S. bank regulatory update. Please feel free to reach out to us to discuss any of the below topics further.

KEY TAKEAWAYS

The Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) jointly issued a final rule modifying the enhanced supplementary leverage ratio (eSLR) for the largest banks. The rule is broadly consistent with the proposal and replaces the fixed 2% eSLR buffer for GSIBs and their subsidiaries with a buffer equal to half of the GSIB’s Method 1 surcharge, noting that “[t]his recalibration is important to help mitigate potential disincentives for GSIBs to engage in low-risk, low-return, balance-sheet-intensive activities, such as intermediation by GSIBs’ broker-dealer subsidiaries in markets for Treasury securities, and from holding low-risk assets in general.” In a change to the proposed rule, the buffer would be capped at 1% for subsidiary banks. Although the final rule goes into effect April 1, 2026, it includes an option for banking organizations to start using it as early as January 1, 2026.
The Federal Reserve finalized revisions to its Large Financial Institution (LFI) rating system for large bank holding companies and its rating system for supervised insurance organizations (SIOs), specifically to address the “well managed” status of those firms under the frameworks. The effective date of the final notice is January 16, 2026.
The Federal Reserve publicly released a Statement of Supervisory Operating Principles (Statement), previously provided to all Federal Reserve supervisory leadership and staff, which aligns supervisory practices with the policy direction set by Vice Chair for Supervision Michelle Bowman. The Statement translates Vice Chair for Supervision Bowman’s priorities into specific supervisory and operational expectations for implementation by supervisory staff of the Federal Reserve Board and Federal Reserve Banks.
As signaled by leadership of the federal banking agencies, the Federal Reserve, FDIC and OCC issued a proposed rule to lower the community bank leverage ratio (CBLR) requirement from 9% to 8% and extend the compliance grace period from two to four quarters. The proposal is part of a broader recalibration of capital and other regulatory and supervisory requirements for smaller institutions. Comments on the proposal are due by January 30, 2026.
The OCC continued its regulatory and supervisory tailoring efforts for community banks (now defined as institutions with up to $30 billion in assets) by issuing new guidance clarifying BSA/AML examination procedures, reducing certain data-collection requirements and outlining how examiners may exercise discretion in the examination process. The OCC also issued a request for information (RFI) seeking input on the “key challenges” and “barriers” community banks face when engaging with core service providers and other essential third-party providers. Comments on the RFI are due by January 27, 2026.
The OCC published an interpretive letter authorizing national banks to pay network fees on blockchain networks to support otherwise permissible activities and hold, as principal, amounts of crypto-assets reasonably necessary to cover anticipated network fee obligations. The interpretive letter continues the OCC’s incremental approach to clarifying the permissibility of crypto-related activities.

DEEPER DIVES

Federal Banking Agencies Finalize Changes to Enhanced Supplementary Leverage Ratio. On November 25, 2025, the Federal Reserve, FDIC and OCC jointly issued a final rule modifying the enhanced supplementary leverage ratio (eSLR) requirements applicable to the largest banks. The rule was adopted unanimously by the FDIC and OCC but approved by a 5-2 vote of the Federal Reserve Board. In dissent, Governor Cook expressed concerns with the reduction of capital at the holding company levels, noting that “well-intended, individually reasonable actions can nevertheless result in disproportionately large reductions in overall capital that can reduce the resilience of the system.”

Under the final rule, the eSLR buffer for GSIBs will equal 50 percent of a GSIB’s method 1 surcharge, replacing the current fixed 2% buffer. The banking agencies explained that, since the adoption of the eSLR standards, the supplementary leverage ratio requirements have become a binding constraint rather than a backstop to risk-based capital requirements. Accordingly, the final rule would modify the calibration of the eSLR standards to help ensure that supplementary leverage ratio requirements generally serve as a backstop to risk-based capital requirements. The eSLR final rule also modifies the standard for subsidiary depository institutions from the current 6 percent standard (3 percent supplementary leverage ratio requirement plus 3 percent) to 3 percent plus the lesser of (i) one percent; or (ii) 50 percent of the method 1 risk-based capital surcharge applicable to the GSIB holding company that controls the national bank or federal savings association. It also removes the eSLR standard from the definition of “well capitalized” under the prompt corrective action framework, further aligning leverage requirements with their intended role.

Insights. The adoption of the eSLR rule further reflects the tailoring efforts on banking regulation and reducing U.S. gold-plating relative to international standards. As adopted, the banking agencies emphasized the purpose of the eSLR to serve as a buffer based on the GSIB surcharge framework would tailor the eSLR to each GSIB’s systemic footprint and produce a calibration that is consistent with the objective for supplementary leverage ratio requirements to act as a backstop to risk-based capital requirements. It also highlights the importance of balancing the risks within the financial system with the intended role of financial institutions, including that “GSIBs play a key role in supporting market liquidity and providing financing in Treasury markets.” At the same time, dissenting Federal Reserve Governors expressed skepticism whether additional balance-sheet capacity will, in practice, be deployed to Treasury-market support during periods of stress, underscoring the policy debate over the rule’s implications for capital resilience.

Federal Reserve Finalizes Revisions to Supervisory Rating Framework for Large Bank Holding Companies and Supervised Insurance Organizations. On November 5, 2025, the Federal Reserve finalized revisions to its LFI rating system for large bank holding companies and its rating system for SIOs specifically to address the “well managed” status of those firms. The final notice was adopted substantially as proposed in July. Under the revised framework, a firm will be considered “well managed” if it receives at least two Broadly Meets Expectations or Conditionally Meets Expectations component ratings and no more than one Deficient-1 component rating. A firm will not be considered “well managed” if it receives a Deficient-1 for two or more component ratings or it receives a Deficient-2 for any of the component ratings.

The final notice also eliminates the enforcement presumption that a firm with one or more Deficient-1 component ratings will be subject to an informal or formal enforcement action. Instead, such firms may be subject to a formal or informal enforcement action based on the particular facts and circumstances. The final rule makes parallel changes to the SIO ratings framework. Federal Reserve Board Governor Barr issued a dissenting statement.

Insights. According to the Federal Reserve, as of the third quarter of 2025, 36 holding companies were subject to the LFI framework, 17 of which were not considered “well managed”. Federal Reserve staff estimated that the revised framework would reduce the number of holding companies categorized as not “well managed” by seven. Importantly, however, only three of the seven firms would also qualify as “well managed” under the Bank Holding Company Act, which requires that both the holding company and each depository institution subsidiary be “well managed” in order for the firm to elect financial holding company status.
These data points—and the continuing emphasis across the federal banking agencies to align supervisory ratings with material financial risks—strongly suggest that CAMELS ratings will be the next area of reform. Recent statements by Vice Chair for Supervision Bowman (“we and the other FFIEC agencies are reviewing the CAMELS ratings system, which is long past due for reform”) and FDIC Acting Chairman Hill (“we are also working hard on potential reforms to the CAMELS rating system”) reinforce this hypothesis.

Federal Reserve Releases Statement of Supervisory Operating Principles. On November 18, 2025, the Federal Reserve released a Statement of Supervisory Operating Principles (Statement), previously provided to all Federal Reserve supervisory leadership and staff. The Statement aligns supervisory practices with the policy direction set by Vice Chair for Supervision Michelle Bowman—namely refocusing the examination process to prioritize a firm’s material financial risks over process-related factors or concerns.

Insights. The Statement reinforces the Federal Reserve’s continuing shift under Vice Chair for Supervision Bowman toward a supervisory philosophy centered on material financial risks rather than process-driven or documentation-centric deficiencies. Although the principles articulated in the Statement parallel those reflected in the OCC’s and FDIC’s recent proposal to define “unsafe or unsound practices” and revise the framework for issuing MRAs and other supervisory communications—and, indeed, the Statement notes that work in these areas is already underway—the Statement is broader in scope. It addresses expectations for the use of horizontal reviews, supervisory practices related to liquidity risk, ratings considerations and other themes that affect how examinations are conducted across the Federal Reserve System. Because the Statement represents a formalized directive to supervisory staff, institutions should expect its principles to be incorporated into examination planning and execution relatively quickly.

Federal Banking Agencies Propose Revisions to the CBLR Framework. On November 25, 2025, the Federal Reserve, FDIC and OCC issued a proposed rule to revise the community bank leverage ratio (CBLR) framework. The proposal would lower the CBLR requirement from 9% to 8%—measured as tier 1 capital divided by average total consolidated assets—and would extend the grace period for qualifying community banking organizations that temporarily fall below the threshold from two quarters to four quarters (subject to a limit of eight quarters in any five-year period). The agencies stated that these changes are intended to provide community banking organizations with greater flexibility to manage balance sheet fluctuations and temporary stress conditions.

According to the proposal, lowering the CBLR to 8% would allow an estimated 475 additional community banking organizations to qualify for the CBLR framework, should they choose to opt in. Under the CBLR framework, a qualifying community banking organization (defined as an insured depository institution or its holding company with total consolidated assets of less than $10 billion and satisfying certain other criteria) is deemed to satisfy all generally applicable risk-based and leverage capital requirements and, in the case of an insured depository institution, is considered well capitalized under the agencies’ prompt corrective action framework.

Insights. The proposed revisions to the CBLR framework reflect the federal banking agencies continued focus on regulatory tailoring for smaller institutions. The proposal aligns with recent efforts at the agencies to recalibrate supervisory expectations for community banks. These initiatives solidify the agencies’ willingness to differentiate smaller institutions from larger, more complex firms. In the case of smaller institutions considering an opt-in, lowering the CBLR to 8% and extending the grace period would provide community banks with greater flexibility to manage short-term fluctuations in deposits, liquidity positions and asset mixes without immediately triggering more complex risk-based capital requirements.

OCC Continues Regulatory and Supervisory Tailoring Efforts for Community Banks. On November 24, 2025, the OCC announced a series of supervisory and regulatory actions that build on the OCC’s broader initiative to tailor risk-based supervision for smaller institutions and prioritize reforms aligned with the risk profiles of community banks.

In two BSA/AML-related bulletins, the OCC issued supplementary guidance clarifying how examiners should apply BSA/AML examination procedures at community banks. The guidance tailors the agency’s approach based on the generally low money-laundering and terrorist-financing risk profiles of community banks, allowing examiners to rely on a bank’s actual risk profile rather than minimum procedural baselines that may be disproportionate to the risks posed. The OCC also announced the discontinuation of its Money Laundering Risk (MLR) system data collection, eliminating a longstanding reporting requirement.

Separately, the OCC issued a request for information (RFI) seeking input on the challenges community banks face in working with core service providers and other essential third-party providers. The RFI reflects the OCC’s concerns that structural barriers in the third-party-services market may impair community banks’ competitiveness and operational resilience. Comments on the RFI are due by January 27, 2026.

Insights. Similar to its October 6, 2025 announcement, the OCC’s initiatives underscore again its continued commitment to regulatory tailoring for community banks and reflect an interagency recognition that one-size-fits-all regulation can disproportionately burden smaller institutions. The RFI on core service providers highlights a longstanding structural challenge: many community banks operate in a highly concentrated market for core service providers, limiting their negotiating leverage and constraining their ability to innovate. Attention to this issue could precede future guidance or rulemaking on third-party risk management, potentially reshaping expectations for both community banks and their vendors.

FDIC Issues Final Rule Adjusting and Indexing Certain Regulatory Thresholds. Consistent with broader initiatives aimed at reducing regulatory burden on smaller institutions, on November 25, 2025, the FDIC finalized amendments to adjust several regulatory thresholds across its regulations to reflect inflation and provide for future adjustments under an indexing methodology. The final rule affects six parts of the FDIC’s regulations: Part 303 (filing procedures); Part 335 (securities of nonmember banks and state savings associations); Part 340 (restrictions on sale of assets by a failed institution by the FDIC); Part 347 (international banking); Part 363 (audit committee requirements); and Part 380 (orderly liquidation authority). The final rule becomes effective January 1, 2026.

With respect to Part 363 audit requirements, the FDIC clarified that insured depository institutions that have prospective filing and compliance requirements based on thresholds in place in 2025, but that will fall below the updated thresholds as of January 1, 2026, will not be required to comply with Part 363 requirements for the 2025 reporting cycle.

Insights. Most notably, the proposed rulemaking adjusts specific thresholds in 12 C.F.R. Part 363, including those set forth in the table below. According to the FDIC, increasing Part 363’s applicability threshold would result in approximately 780 fewer institutions being subject to Part 363. Raising specific Part 363 thresholds from $1 billion to $5 billion would benefit more than 700 institutions, many of whom should benefit from changes to the audit committee composition requirements and reduced audit costs. Institutions should be mindful that relief under Part 363 does not override: (i) applicable audit or audit committee composition requirements for state-chartered banks under state law; and (ii) audit committee requirements that apply to public companies or subsidiaries of public companies under federal securities laws and exchange listing standards. The indexing methodology incorporated into the final rule also signals that the FDIC intends for these thresholds to evolve over time, potentially reducing the need for future ad hoc adjustments. As a result, institutions near the revised thresholds should expect periodic updates and plan for governance and audit requirements to shift accordingly.

12 C.F.R. Part 363	Subject	Current threshold	Amended threshold
§ 363.1(a)	Applicability	$500 million	$1 billion
§ 363.2(b)(3)	Assessment of the effectiveness of internal controls	$1 billion	$5 billion
§ 363.3(b)	Independent auditor attestation concerning effectiveness of internal control over financial reporting	$1 billion	$5 billion
§ 363.4(a)(2)	Part 363 Annual Report	$1 billion	$5 billion
§ 363.4(c)(3)	Independent public accountant’s letters and reports	$1 billion	$5 billion
§ 363.5(a)(1)	Audit committee composition – all independent directors	$1 billion	$5 billion
§ 363.5(a)(2)	Audit committee composition – majority independent directors	$500 million/ $1 billion	$1 billion/ $5 billion
§ 363.5(b)	Members with “banking or related financial management expertise”	$3 billion	$5 billion
Remaining thresholds in the Part 363 Guidelines will increase from $500 million to $1 billion; $1 billion to $5 billion; and $3 billion to $5 billion. The “independent of management” criteria concerning director compensation will increase from $100,000 to $120,000 to align with the listing standards of national securities exchanges for purposes of making director independence determinations.

OTHER NOTABLE ITEMS

OCC Clarifies Bank Authority to Engage in Certain Crypto-Related Activities. On November 18, 2025, the OCC issued Interpretive Letter No. 1186, confirming that national banks may hold crypto-assets as principal to pay network fees (gas fees) when needed to support otherwise permissible activities. The Interpretive Letter further authorizes banks to hold limited amounts of crypto-assets necessary to test internally developed or third-party crypto platforms before offering services to customers.

OCC Makes Public Supervisory Non-Objection Requests for Crypto Activities. The OCC published 21 supervisory non-objection requests, along with corresponding agency responses, where applicable, submitted by national banks seeking to engage in digital assets activities under the now-rescinded Interpretive Letter No. 1179. The summaries provide insight into the types of digital asset activities banks have explored and the supervisory considerations applied at the time.

Federal Reserve Extends Comment Period on Stress Test Transparency Proposal. On November 21, 2025, the Federal Reserve extended the comment period for its proposal to enhance transparency in supervisory stress test models and scenarios, moving the date from January 22, 2026 to February 21, 2026. The extension does not affect the separate December 1, 2025 deadline for comments on the proposed 2026 stress test scenarios.

Federal Reserve Board Publishes Financial Stability Report. On November 7, 2025, the Federal Reserve published its semi-annual Financial Stability Report. According to the Federal Reserve Bank of New York’s industry survey, there was another moderate increase relative to its spring 2025 survey in the percentage of respondents citing risks emanating from policy uncertainty as their top risk to financial stability, with meaningful increases in the percentage of respondents citing geopolitical risks and the potential for elevated long-term interest rates as top risks to financial stability. Notably, the share of respondents identifying risks associated with AI-driven market sentiment surged, with about 30% naming AI-related sentiment among their top near-term concerns, signaling a new and significant source of financial stability risk.

Speech by Governor Miran on Stablecoins and Monetary Policy. On November 7, 2025, Federal Reserve Board Governor Stephen Miran delivered a speech titled “A Global Stablecoin Glut: Implications for Monetary Policy.” In his speech, Miran argued that the rapid global growth of dollar-denominated stablecoins is increasing demand for U.S. Treasuries and other liquid dollar assets, a trend he cautioned could put downward pressure on the neutral interest rate (r*) with important implications for monetary policy. He emphasized that while he does not expect stablecoins to broadly draw deposits away from U.S. banks, he anticipates meaningful future stablecoin growth will come from foreign users and investors seeking dollar-based payment and savings instruments they cannot easily access in their home jurisdictions.

Speeches by Vice Chair Jefferson on AI. On November 7, 2025, Vice Chair Jefferson delivered a speech titled “AI and the Economy,” and on November 21, 2025, delivered a speech titled “AI, the Economy, and Financial Stability,” in which he argued that rapid advances in AI could materially reshape productivity, employment and inflation dynamics with important implications for the Federal Reserve’s dual mandate. Across both speeches, he emphasized rising uncertainty about AI-driven structural change and highlighted growing concerns—reflected in the Federal Reserve’s most recent Financial Stability Report—that shifts in sentiment around AI may increasingly influence market functioning and financial system resilience.

Speech by Governor Cook on Financial Stability. On November 20, 2025, Governor Lisa D. Cook delivered a speech titled “A Policymaker’s View of Financial Stability.” In her speech, Governor Cook stated that while the U.S. financial system remains broadly resilient, she identified several emerging vulnerabilities deserving close attention: elevated asset valuations, rapid growth of private credit markets and the growing role of hedge funds in the U.S. Treasury market.

Supreme Court Declines Expedited Review of Harper-Otsuka Removal Challenge. On November 24, 2025, the Supreme Court declined expedited review in the petition filed by former National Credit Union Administration Board members Todd Harper and Tanya Otsuka contesting their April 2025 removals. The Court’s decision leaves the challenge pending before the U.S. Court of Appeals for the D.C. Circuit, where proceedings remain paused. The denial also places greater focus on Trump v. Slaughter, which the Court will hear in December. Although that case concerns removal protections for Federal Trade Commission officials, the Court’s resolution is expected to address broader constitutional questions surrounding presidential authority to remove leaders of independent regulatory agencies.

CFPB Notifies Court it Cannot Lawfully Draw Funds from the Federal Reserve. On November 11, 2025, the Consumer Financial Protection Bureau (CFPB) filed a notice in National Treasury Employees Union v. Vought informing the court that the U.S. Department of Justice’s (DOJ) Office of Legal Counsel has concluded the CFPB may not legally request further funds from the Federal Reserve under the statutory funding mechanism established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The notice states that the agency expects to have sufficient resources to continue operations through at least December 31, 2025. Because of the funding limitation, news reports have indicated the CFPB reportedly plans to begin transferring its remaining enforcement litigation and pending cases to the DOJ starting in early 2026.

Acting Chairman Hill’s Nomination Advances to Senate Floor. On November 19, 2025, the nomination of Acting Chairman Travis Hill to be the Chairman of the FDIC Board advanced out of the Senate Banking Committee.

FDIC Releases Public Sections of Six Banks’ Informational Filings. On November 30, 2025, the FDIC released the public sections of informational filings for six large insured depository institutions.

FDIC Updates PPE List. On November 26, 2025, the FDIC announced an updated list (as of November 15, 2025) of companies that have submitted notices for a Primary Purpose Exception (PPE) under the 25% or Enabling Transactions test.

FRBNY’s Teller Window Discusses the Federal Home Loan Bank System. On November 19, 2025, the Federal Reserve Bank of New York’s Teller Window published an article titled “Understanding the Federal Home Loan Bank System: What It Is and Why It Matters.”

FRBNY’s Liberty Street Economics Blog Examines U.S. Banks’ Nonbank Footprint. On November 18, 2025, the Federal Reserve Bank of New York published a Liberty Street Economics blog post titled “U.S. Banks Have Developed a Significant Nonbank Footprint,” examining how U.S. banks have evolved from entities principally focused on taking deposits and making loans to diversified conglomerates incorporating a variety of nonbank activities. In a companion post titled “Banks Develop a Nonbank Footprint to Better Manage Liquidity Needs,” the Liberty Street Economics blog examines an important driver of this evolution: the need to efficiently manage liquidity needs.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral and Ro Spaziani.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work or any of the member of the Financial Institutions practice group:

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ro Spaziani, New York (+1 212.351.6255, rspaziani@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

Ella Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

Sam Raymond, New York (+1 212.351.2499, sraymond@gibsondunn.com)

Rachel Jackson, New York (+1 212.351.6260, rjackson@gibsondunn.com)

Hayden McGovern, Dallas (+1 214.698.3142, hmcgovern@gibsondunn.com)

On October 21, 2025, the 2025 National Association of Attorneys General (NAAG) Consumer Protection Fall Conference brought together State Attorneys General (State AGs), their staff, and public and private sector stakeholders to discuss priorities and trends in consumer protection enforcement.

The conference highlighted State AGs’ focus on consumer protection enforcement efforts, including through the establishment of dedicated resources within State AG offices to pursue consumer issues.

Consumer Protection As An Enforcement Priority

A bipartisan panel of state AGs, including New Hampshire Attorney General John Formella, Pennsylvania Attorney General Dave Sunday, and D.C. Attorney General Brian Schwalb, moderated by Todd Leatherman (NAAG, Director of Center for Consumer Protection), outlined their approaches to consumer protection enforcement and their offices’ top priorities. The panel highlighted opportunities for bipartisan work and cross-state collaboration in the consumer protection space, particularly on issues related to consumer fraud. D.C. AG Brian Schwalb said he viewed affordability as central to consumer protection: “People should get what they pay for, they shouldn’t be scammed, and they shouldn’t be taken advantage of.” AG Schwalb contended that what he viewed as a tapering of federal enforcement by the Department of Justice (DOJ), Federal Trade Commission (FTC), and Consumer Financial Protection Bureau (CFPB) means that companies should expect increased state AG action as well as increased collaboration between state AGs. The panel of State AGs all noted their concerns about scams associated with emerging technologies, such as cryptocurrency and AI. New Hampshire AG Formella explained that his office is particularly focused on the use of technology in the collection and use of consumer data.

Price Transparency Enforcement

Later in the day, Jessica Whitney (Deputy Attorney General, Minnesota Attorney General’s Office) moderated a conversation between Nick Akers (Senior Assistant Attorney General, Consumer Protection Section, Office of the California Attorney General), Beth Chun (Special Counsel, Kelly Drye), Doug Crapo (Deputy Attorney General, Consumer Protection Department, Utah Attorney General’s Office), and Jason Pleggenkuhle (Manager of the Consumer Protection Division, Minnesota Attorney General’s Office) which discussed state and federal enforcement actions targeting hidden fees and price transparency.

The panel covered enforcement priorities in Minnesota and California in particular as shaped by state legislation. Assistant AG Akers highlighted California’s efforts to regulate price disclosures against online delivery platforms, and Jason Pleggenkuhle described two recent statutes passed by the Minnesota legislature targeting price transparency – the Minnesota Price Transparency “Junk Fees” Act and Ticket Sales Price Transparency (Taylor’s Law).

Deputy Utah AG Doug Crapo detailed the rulemaking background of the FTC’s Junk Fees Rule. The Junk Fees Rule requires the mandatory disclosure of the total price, including all mandatory fees, in the advertised price for two industries: live-event tickets and short-term lodging. Crapo noted that enforcement actions have been brought under this rule against ticket sale platforms in D.C. and Texas, and emphasized he expects price transparency to continue to grow as an enforcement area. Panelists also noted that states beyond California and Minnesota have recently passed laws regulating fee transparency, though those state laws vary in terms of the industries to which they apply and disclosure requirements. The panel agreed that in the absence of broader applicability of the FTC Junk Fees Rule, a patchwork of state regulation and enforcement is emerging in this area.

Looking Ahead

The conference emphasized that State AGs will continue to pursue consumer protection investigations and enforcement actions amid what several AGs argued they perceive as reduced federal action by DOJ, FTC, and CFPB. The sessions suggest that price transparency and the use of emerging technology, including AI-related scams and collection of consumer data, will remain enforcement priorities for state regulators. Multistate actions could also increase in frequency.

Businesses should expect that state regulators will continue to apply established consumer protection laws to address new and evolving challenges.

The following Gibson Dunn lawyers prepared this update: Natalie Hausknecht, Ashley Rogers, Gustav Eyler, James Zelenay, Rachel Baron, Zoey Clark, and Wynne Leahy.

State Attorneys General (AG) Task Force:

Artificial Intelligence:
Keith Enright – Palo Alto (+1 650.849.5386, kenright@gibsondunn.com)
Eric D. Vandevelde – Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Antitrust & Competition:
Eric J. Stock – New York (+1 212.351.2301, estock@gibsondunn.com)

Climate Change & Environmental:
Rachel Levick – Washington, D.C. (+1 202.887.3574, rlevick@gibsondunn.com)

Consumer Litigation & Products Liability:
Christopher Chorba – Los Angeles (+1 213.229.7396, cchorba@gibsondunn.com)

DEI & ESG:
Stuart F. Delery – Washington, D.C. (+1 202.955.8515,sdelery@gibsondunn.com)
Mylan L. Denerstein – New York (+1 212.351.3850, mdenerstein@gibsondunn.com)

Labor & Employment:
Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Los Angeles (+1 213.229.7107, ksmith@gibsondunn.com)

Tech & Innovation:
Ashlie Beringer – Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

From the Derivatives Practice Group: This week, the U.S. Senate Agriculture Committee advanced Michael Selig’s nomination to serve as Chairman and Commissioner of the CFTC to the full Senate for consideration.

Please note that there will be no newsletter next week as we pause for the U.S. Thanksgiving holiday. We wish all who celebrate a happy Thanksgiving!

New Developments

U.S. Senate Agriculture Committee Advances CFTC Chair Nominee. On November 20, the U.S. Senate Committee on Agriculture, Nutrition, and Forestry advanced Michael Selig’s nomination to serve as Chairman and Commissioner of the CFTC to the full Senate for consideration. [NEW]

Senate Agriculture Committee Publishes Draft Crypto Market Structure Bill. On November 10, U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) and Senator Cory Booker (D-NJ) released a discussion draft of legislation that would provide new authority to the CFTC to regulate digital commodities. According to the Committee, the proposal is bipartisan and expands upon the CLARITY Act approved by the House of Representatives in July. [NEW]

Deputy Director of Enforcement Antonia M. Apps to Conclude Her Tenure at the SEC. On November 13, the SEC announced that Antonia M. Apps, Deputy Director of the Division of Enforcement (Northeast), will conclude her tenure with the agency effective December 1, 2025. Ms. Apps was appointed Acting Deputy Director of the Division of Enforcement in January 2025 and, subsequently, Deputy Director of Enforcement (Northeast), helping to lead the Division of Enforcement on a national level.

New Developments Outside the U.S.

ESMA Finds that Distribution Costs Account for Almost Half of Total Costs Paid to Invest in UCITS. On November 6, ESMA published its report on the total costs of investing in the Undertakings for Collective Investment in Transferable Securities (UCITS) and Alternative Investment funds. According to ESMA, the report provides an innovative analysis on distribution costs, which account for 48% of total costs for UCITS, which it said are primarily driven by the traditional and dominant role of credit institutions and investment firms in the distribution chain across many Member States.

New Industry-Led Developments

ISDA Publishes Paper on Proposal 6 of BCBS-CPMI-IOSCO Report on Margin Transparency. On November 14, ISDA published a paper containing proposals that it said could improve the margin transparency process set for in proposal 6 of the final Basel Committee on Banking Supervision, Committee on Payments and Market Infrastructures and International Organization of Securities Commissions report on margin transparency. [NEW]

IOSCO Publishes Final Report on Neo-Brokers. On November 11, IOSCO published its Final Report on Neo-Brokers. The report sets forth five recommendations for IOSCO members and neo-brokers, including acting honestly and fairly with retail investors as well as providing appropriate disclosure of fees and charges to retail investors and advertising.

IOSCO Publishes Final Report on Financial Asset Tokenization. On November 11, IOSCO published its Final Report on the Tokenization of Financial Assets. According to IOSCO, the report seeks to build a shared understanding among IOSCO members of how tokenization is being adopted across capital markets and how regulators are responding, and examines potential implications for market integrity and investor protection to guide members in shaping effective regulatory responses.

ISDA Publishes Paper About ISDA SIMM. On November 11, ISDA published a paper that summarizes the reasons why it believes the ISDA Standard Initial Margin Model (ISDA SIMM) has become the trusted industry standard for calculating risk-sensitive initial margins to satisfy margin rules for non-cleared derivatives.

ISDA and the Credit Derivatives Governance Committee Issue Invitation to Tender for DC Administrator Role. On November 11, ISDA and the Credit Derivatives Governance Committee issued an invitation to tender for an independent regulated entity to serve as the administrator for the Credit Derivatives Determinations Committees (DCs), which includes assuming the role of DC secretary. ISDA said that the DC secretary is responsible for various administrative tasks, including distributing questions submitted by eligible market participants to the relevant DC members, convening DC meetings and publishing the results of DC votes.

ISDA Publishes Industry Perspectives on ISDA DRR. On November 10, ISDA published a report that examines how financial institutions are adopting the ISDA Digital Regulatory Reporting (DRR) solution, which ISDA describes as a standardized and open-access initiative built on the Fintech Open Source Foundation Common Domain Model. ISDA noted that the report draws on insights from structured interviews with industry stakeholders and highlights how firms are implementing the ISDA DRR to enhance regulatory reporting processes.

ISDA Publishes Updates to SPS Matrix and SPS Naming Conventions. On November 7, in an effort to increase consistency and understandability, ISDA updated its naming convention for how the Settlement Price Sources, as defined in the ISDA Digital Asset Derivatives Settlement Price Matrix, should be named.

ISDA Issues Guidance on Delayed CPI-U Due to Government Shutdown. On November 7, ISDA published guidance addressing the potential delay in the release of the U.S. Consumer Price Index for All Urban Consumers (CPI-U) resulting from the current U.S. government shutdown. The guidance provides clarification on how such delays may affect the calculation and settlement of inflation-linked derivatives referencing the CPI-U.

Global Standard-setting Bodies Publish Assessment Report and Consultative Report On General Business Risks and Losses. On November 7, the BIS Committee on Payments and Market Infrastructures and the IOSCO published an implementation monitoring report on general business risks and a consultative report on financial market infrastructures’ management of general business risks and general business losses.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Marc Aaron Takagaki, Hayden McGovern, Karin Thrasher, and Alice Wang*.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com )

Hayden K. McGovern, Dallas (214.698.3142, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

*Alice Wang, a law clerk in the firm’s Washington, D.C. office, is not admitted to practice law.

Join us for a recorded presentation that provides an overview on crossover rounds leading up to an Initial Public Offering. The one-hour CLE session provides key legal and operational considerations for companies looking to undertake a venture financing ahead of a proposed IPO.

MCLE CREDIT INFORMATION:

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour.

Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. It is the opinion of this provider that this activity qualifies for up to 1 hour toward your annual CLE requirement in Connecticut, including 0 hour(s) of ethics/professionalism.

PANELISTS:

Melanie Neary is a partner in the San Francisco office of Gibson Dunn where she practices in the firm’s Capital Markets Practice Group, focusing on representing leading life sciences companies and investors. Melanie advises clients on a wide range of complex financing transactions and matters, including initial public offerings, secondary equity offerings, and venture and growth equity financings, as well as mergers and acquisitions, spin-offs, and PIPEs. Melanie regularly serves as principal outside counsel for numerous publicly-traded companies and advises management and boards of directors on corporate law matters, Securities and Exchange Commission reporting requirements and ownership filings, and corporate governance.

Chris Trester is a partner in the Palo Alto office of Gibson Dunn and Chair of our Emerging Companies/Venture Capital Practice Group. He focuses his corporate practice on representing start-ups and investors (ranging from angel investors to corporate venture capital) in the full life cycle of emerging companies from incorporation to financings to exits, with a specific emphasis on the tech, entertainment and life science industries. He also counsels companies on general corporate matters, corporate governance and accounting issues.

This edition of Gibson Dunn’s Federal Circuit Update for October summarizes the current status of petitions pending before the Supreme Court and recent Federal Circuit decisions concerning standing, jurisdiction, recusal, and the meaning of “by another” under pre-AIA 35 U.S.C. § 102.

Federal Circuit News

Supreme Court:

The Supreme Court granted the petition in Trump v. V.O.S. Selections, Inc. (US No. 25-250) as we summarized in our September 2025 update. Oral arguments were heard on November 5, 2025.

Noteworthy Petitions for a Writ of Certiorari:

There were a couple potentially impactful petitions filed before the Supreme Court in October 2025:

Percipient.ai, Inc. v. United States (US No. 25-428): The question presented is: “Did the en banc Federal Circuit err in holding that a person must meet the requirements for challenging a solicitation or contract award under the first two prongs of 28 U.S.C. § 1491(b)(1) to qualify as an ‘interested party’ who can challenge violations under the broader third prong?” The response brief is due on December 8, 2025, and to date, five amicus briefs have been filed.

Recentive Analytics, Inc. v. Fox Corp. (US No. 25-505): The questions presented are: (1) “Whether the Federal Circuit’s approach to patent eligibility under 35 U.S.C. § 101 flouts this Court’s instruction to consider preemption, as discussed in Alice Corp. v. CLS Bank International and Mayo Collaborative Services v. Prometheus Laboratories, Inc.” (2) “Whether the Federal Circuit erred in holding that claims directed to the application of machine-learning techniques to new data environments are categorically ineligible for patent protection under Section 101, absent a showing of improvement to the underlying machine-learning model itself.” The respondent waived its right to file a response. The Court will consider this petition at its December 5, 2025 conference.

We provide an update below of the petitions pending before the Supreme Court, which were summarized in our September 2025 update:

In MSN Pharmaceuticals, Inc. v. Novartis Pharmaceuticals Corp. (US No. 25-225), a response brief was filed on November 7, 2025, and six amicus briefs have been filed.

In Lynk Labs, Inc. v. Samsung Electronics Co. (US No. 25-308), after the respondent waived its right to file a response, the Court requested a response, which is due January 2, 2026. Two amicus briefs have been filed.

The Court denied the petitions in EcoFactor, Inc. v. Google, LLC (US No. 25-341) and Gesture Technology Partners, LLC v. Unified Patents, LLC (US No. 24-1281).

Upcoming Oral Argument Calendar

The list of upcoming arguments at the Federal Circuit is available on the court’s website.

Key Case Summaries (October 2025)

US Inventor, Inc. et al. v. PTO, No. 24-1396 (Fed. Cir. Oct. 3, 2025): US Inventor filed a petition for rulemaking proposing certain limitations on the Patent and Trademark Office (PTO)’s authority to institute inter partes review (IPR) and post grant review (PGR). The PTO denied the petition, reasoning that it overlapped with a then-pending request for comments on a rule regarding the PTO’s discretion to institute IPR and PGR. US Inventor sued the PTO for violating the Administrative Procedure Act (APA) and America Invents Act (AIA) by denying its rulemaking petition without sufficiently explaining its denial and without promulgating notice-and-comment rulemaking. The district court dismissed the complaint for lack of associational standing because US Inventor’s theory of injury was too speculative.

The Federal Circuit (Reyna, J., joined by Lourie and Stark, JJ.) affirmed. The Court explained that “[a]dvocacy organizations like appellants have associational standing if . . . [inter alia] ‘at least one of their members would have standing to sue.’” The Court determined that US Inventor failed to allege that at least one of its members had standing to sue because none of its members suffered a non-speculative injury-in-fact from the PTO’s denial of the petition for rulemaking. Specifically, the Court determined that US Inventor’s alleged harm based on the PTO’s institution of a third party’s petition, which would result in potential cancellation of appellants’ members’ patent claims, was speculative and insufficient for standing.

IQE, PLC v. Newport Fab, LLC et al., No. 24-1124 (Fed. Cir. Oct. 15, 2025): IQE makes wafer products used in semiconductors. Newport et al. (collectively referred to as Tower) are semiconductor manufacturers that make specialized integrated circuits that utilize said wafers. IQE shared information with Tower under a mutually binding non-disclosure agreement when the parties began discussing a potential collaboration. While discussions were ongoing, Tower filed patent applications directed to porous semiconductor technology that IQE alleges it developed. IQE sued Tower asserting several state and federal causes of action relating to the alleged theft of trade secrets and a claim for correction of inventorship on the patents. Tower moved to dismiss and filed an anti-SLAPP (Strategic Lawsuit Against Public Participation)[1] motion to strike several of IQE’s claims, arguing that Tower’s use of confidential information to file the patent applications was petitioning activity protected by the First Amendment. The district court denied the motion.

The Federal Circuit (Hughes, J., joined by Stark and Wang (district judge sitting by designation), JJ.) remanded the case for further proceedings. Because there was not yet a final judgment from the district court, the Court first had to decide whether the denial of Tower’s anti-SLAPP motion was immediately appealable. The Court explained that the collateral order doctrine is an exception to the rule of finality, and an interlocutory appeal is allowed when a trial court’s order affects rights that will be irretrievably lost in the absence of an immediate appeal. The Court then determined that Federal Circuit law, and not Ninth Circuit law, applied in this case because it was a question of the Federal Circuit’s jurisdiction. The Court concluded that the denial of an anti-SLAPP motion to strike under California law is immediately appealable under the collateral order doctrine in part because the denial of an anti-SLAPP motion would be unreviewable on appeal after final judgment as Tower would already have had to litigate the case.

Centripetal Networks LLC v. Palo Alto Networks Inc., No. 23-2027 (Fed. Cir. Oct. 18, 2025): Palo Alto Networks filed an IPR challenging claims of Centripetal’s patent directed to technology for detecting network threats in encrypted communications. A Patent Trial and Appeal Board (Board) panel, including Administrative Patent Judge McNamara, instituted the IPR. After the Board instituted IPR, Cisco joined the proceeding. Centripetal later learned that Judge McNamara owned Cisco stock and filed a motion requesting recusal of the entire panel and vacatur of the institution decision, asserting that Judge McNamara’s stock ownership cast a shadow over the whole panel. Judge McNamara disagreed that regulations required his recusal, but he nonetheless withdrew as did one of the other judges on the panel. They were replaced by two new judges and the new panel denied Centripetal’s motion to vacate, calling the arguments frivolous and finding the request untimely.

The Federal Circuit (Cunningham, J., joined by Moore, C.J. and Hughes, J.) vacated and remanded. The Court held that the Board did not abuse its discretion in finding the recusal motion untimely. The Court explained that Centripetal was aware of Judge McNamara’s stock holdings, but sat on the conflict for more than three months and only raised recusal concerns after it received unfavorable decisions. The Court also noted that the unique setup of the Board and the compressed timeline “heightens the need to raise conflicts at the first opportunity.”

Merck Sorono S.A. v. Hopewell Pharma Ventures, Inc., Nos. 25-1210, 25-1211 (Fed. Cir. Oct. 30, 2025): Hopewell filed IPR petitions challenging Merck’s patents directed to methods for treating multiple sclerosis (MS) by orally administering cladribine. The Board determined that all challenged claims were unpatentable as obvious over prior art references, Bodor and Stelmasiak. The Board rejected Merck’s argument that Bodor did not qualify as prior art because it had one inventor in common with the patent at issue, and therefore, was not a publication “by another” as required under 35 U.S.C. § 102.

The Federal Circuit (Linn, J., joined by Hughes and Cunningham, JJ.) affirmed. The Court explained that “for a reference not to be ‘by another,’ and thus unavailable as prior art under pre-AIA § 102(e), the disclosure in the reference must reflect the work of the inventor of the patent in question.” The Court explained that when the patented invention is the result of the work of joint inventors, the disclosure must reflect the collective work of the “same inventive entity” to be excluded as prior art. The Court further stated that “[a]ny incongruity in the inventive entity between the inventors of a prior reference and the inventors of a patent claim renders the prior disclosure ‘by another,’ regardless of whether inventors are subtracted from or added to the patent.”

[1] Under California’s anti-SLAPP statute, if a cause of action “aris[es] from any act . . . in furtherance of [a] person’s right of petition or free speech,” the court shall strike the cause of action unless “the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”

The following Gibson Dunn lawyers assisted in preparing this update: Blaine Evanson, Jaysen Chung, Audrey Yang, Hannah Bedard, Vivian Lu, Julia Tabat, and Michelle Zhu.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups, or the following authors:

Blaine H. Evanson – Orange County (+1 949.451.3805, bevanson@gibsondunn.com)
Audrey Yang – Dallas (+1 214.698.3215, ayang@gibsondunn.com)

Appellate and Constitutional Law:
Thomas H. Dupree Jr. – Washington, D.C. (+1 202.955.8547, tdupree@gibsondunn.com)
Allyson N. Ho – Dallas (+1 214.698.3233, aho@gibsondunn.com)
Julian W. Poon – Los Angeles (+ 213.229.7758, jpoon@gibsondunn.com)

Intellectual Property:
Kate Dominguez – New York (+1 212.351.2338, kdominguez@gibsondunn.com)
Josh Krevitt – New York (+1 212.351.4000, jkrevitt@gibsondunn.com)
Jane M. Love, Ph.D. – New York (+1 212.351.3922, jlove@gibsondunn.com)

Corporate directors face unique challenges when confronting major white collar enforcement matters or questions that implicate board oversight of a company’s compliance program. Join lawyers from our White Collar Defense and Investigations Practice Group for a recorded panel discussion of pitfalls, best practices, and practical tips for boards navigating major investigations or interactions with enforcement authorities, as well as authorities’ baseline expectations for compliance program oversight.

MCLE CREDIT INFORMATION:

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hours in the General category.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

PANELISTS:

Barry Berke is a partner in Gibson Dunn’s New York office and Co-Chair of the firm’s White Collar Defense and Investigations Practice Group. He is widely recognized as one of the nation’s leading trial lawyers and white collar defense attorneys. Barry represents corporations, boards, and senior executives in high-stakes criminal, regulatory, and civil matters, including investigations by the DOJ, SEC, and other enforcement agencies. He has extensive experience handling complex litigation and advising clients on compliance and governance issues.

Winston Y. Chan is a partner in Gibson Dunn’s San Francisco office and Co-Chair of the firm’s White Collar Defense and Investigations Practice Group. He leads internal investigations, government enforcement defense, and compliance counseling and regularly represents clients before and in litigation against federal, state, and local agencies—including the DOJ, SEC, and State Attorneys General. He frequently advises boards and senior management on regulatory interactions and guides clients through high-stakes investigations and enforcement exposure. Prior to joining the firm, Winston served as an Assistant United States Attorney in the Eastern District of New York.

Jina Choi is a partner in the San Francisco office of Gibson Dunn and a member of the firm’s Securities Enforcement and White Collar Defense and Investigations Practice Groups. Jina represents and counsels major public and private companies and financial institutions, as well as their executives and boards of directors, on government and internal investigations, enforcement-related litigation, whistleblower complaints and compliance programs.

F. Joseph Warin is chair of the 250-person Litigation Department of Gibson Dunn’s Washington, D.C. office and is Co-Chair of the firm’s White Collar Defense and Investigations Practice Group. He represents corporations in high-stakes internal investigations, enforcement defense, and regulatory litigation spanning FCPA, False Claims Act, securities, compliance counseling, audit and special committee investigations, and complex cross-border matters. His clients include corporations, officers, directors and professionals in regulatory, investigative and trials involving federal regulatory inquiries, criminal investigations and cross-border inquiries by dozens of international enforcers. Early in his career, he served as Assistant United States Attorney in Washington, D.C.