In recent years, both US state and federal legislatures have intensified efforts to enact laws aimed at safeguarding minors in the digital world. However, several court rulings have found that these legislative actions overstepped constitutional limits. This article highlights key legislative initiatives at the US federal level and in California and Texas to protect children and teenagers online, and lawsuits challenging the legality of the California and Texas measures, as of early September 2024.
A federal judge in Texas recently issued a nationwide injunction against the Federal Trade Commission’s rule banning most employee noncompetes. The injunction relieves employers from having to comply with the rule, meaning that employers can maintain noncompete agreements they have in place with employees. The FTC issued a statement indicating that it is considering its appeal options to remove the injunction, and noted that it remains able and willing to challenge the legality of noncompetes on a case-by-case basis, which was never in dispute.
The new disregarded payment loss rules could create material, adverse tax consequences for taxpayers that make check-the-box elections for foreign disregarded entities within a US consolidated group (or otherwise form new foreign disregarded entities). As a result, taxpayers should assess their exposure under the disregarded payment loss rules before making any such elections or forming such entities within the US consolidated group.
On 1 August 2024, the US Department of Justice Criminal Division launched a Corporate Whistleblower Awards Pilot Program (“Program”). The announcement was previewed in remarks by DOJ officials in March, and follows the rollout of the DOJ’s Individual Voluntary Self-Disclosure Program in April 2024 and similar programs implemented in the Southern District of New York (SDNY) and the Northern District of California (NDCA), in February and March 2024. Under the Program certain individuals who provide original and truthful information about corporate misconduct may be eligible to receive an award if the information results in successful criminal prosecution and criminal or civil asset forfeiture.
It comes as no surprise that class actions targeting greenwashing claims — or green advertising — continue to rise in number and complexity.
Although consumer demand and regulatory actions have increasingly motivated businesses to make public statements about their sustainability practices and commitments to climate change, now is the time to take a step back and reevaluate those sustainability claims and marketing. Vague, unverified and unsubstantiated claims can all too easily lead to allegations of greenwashing.
A federal judge in the Northern District of Texas has granted a preliminary injunction that partially enjoins the Federal Trade Commission’s (FTC) final rule on noncompete covenants. In sum, the judge found that “the Commission has exceeded its statutory authority in promulgating the noncompete rule” and noted that the “role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do”. Most notably, the court determined that the plaintiffs are likely to succeed on the merits of their challenge to the rule because the FTC lacks substantive rulemaking authority.
Articles about artificial intelligence appear daily in many legal publications — including this one. But, on 28 May, US Circuit Judge Kevin Newsom of the US Court of Appeals for the Eleventh Circuit wrote a concurring opinion in Snell v. United Specialty Insurance Co. for the specific purpose of floating an idea about how judges might use generative AI.
On 20 May, the US District Court for the Central District of California affirmed a seven-figure jury verdict and granted a permanent injunction in a rare Robinson-Patman Act decision. The RPA is an antitrust statute that prohibits certain kinds of price discrimination in goods purchased for resale. The case, LA International Corp. v. Prestige Brands Holdings, was pursued by a group of local wholesaler plaintiffs that claimed a defendant eye drop manufacturer and its subsidiaries sold the plaintiffs eye drops on less favorable terms than the defendant’s club store wholesale customer.
In June 2024, the New York Assembly passed two bills that, if signed by the Governor, will impose extensive new requirements on companies operating in the state to enhance online protections for children. The first is the New York Child Data Protection Act, which imposes data minimization, consent and data processor agreement obligations on online services operators that actually know they collect minors’ personal information or target their services at minors. The second is the Stop Addictive Feeds Exploitation (SAFE) for Kids Act, which prohibits online service operators from providing minors with “addictive feeds” absent parental consent.
On 20 June 2024, the US Supreme Court ruled, in a 7-to-2 decision in favor of the government, to uphold the constitutionality of the section 965 transition tax in Moore v. United States. This case has been closely watched because it informs a potential future dispute concerning the legality of a wealth tax and significant longstanding portions of the US tax regime. The original question presented was whether, under the Sixteenth Amendment, income must be realized before it can be taxed. The Court concluded that if a controlled foreign corporation realized income, then Congress could attribute that income to the corporation’s US shareholder and tax the shareholder accordingly. By applying this principle of attribution, the Court avoided the question of whether the Sixteenth Amendment includes a realization requirement, leaving that issue open for future litigation.