On the heels of the 44th Annual J.P. Morgan Health Care Conference, Troutman Pepper Locke attorneys Joe Kadlec and Emma Trivax discuss how AI, shifting regulatory scrutiny, and evolving investor oversight are reshaping health care transactions and preview what dealmakers should expect in 2026.

This article was originally published on Law360 and is republished here with permission as it originally appeared on January 15, 2026.

The U.S. Court of Appeals for the Ninth Circuit’s Jan. 2 decision in Sedlik v. Von Drachenberg — the long-running copyright dispute arising from tattoo artist Katherine Von Drachenberg’s rendering of a photograph of Miles Davis captured by photographer Jeffrey Sedlik — may mark an inflection point in the court’s substantial-similarity jurisprudence.[1]

Although the panel affirmed a jury verdict of noninfringement, two concurring judges openly questioned the continued viability of the circuit’s intrinsic test, suggesting it inappropriately constrains judicial review and may lead to unjust outcomes. This signals a potential doctrinal shift with significant implications for copyright litigants.

Background on the Two-Part Test

For nearly five decades, the Ninth Circuit has evaluated copyright infringement under a two-step framework created by the circuit for analyzing substantial similarity in copyright cases derived from Sid & Marty Krofft Television Products Inc. v. McDonald’s Corp. in 1977.

First, courts apply the extrinsic test, an objective comparison of protectable elements, often aided by expert testimony and analytic dissection. Second, if the extrinsic test is satisfied, the case proceeds to the intrinsic test, which asks whether an ordinary reasonable observer would perceive the works as substantially similar in their total concept and feel.[2]

Critically, the intrinsic test is deliberately subjective and reserved for the jury. When a jury finds no substantial similarity under this subjective standard, courts have traditionally deferred to that determination.

In Sedlik, the jury found no intrinsic similarity between the photographer’s image of Miles Davis and Von Drachenberg’s tattoo and sketch, ending the infringement inquiry without reaching the extrinsic test. The panel affirmed, emphasizing its reluctance to disturb a jury’s intrinsic-test determination under existing precedent.

The Judicial Critique

What makes Sedlik notable is not the outcome, but the concurrences. U.S. Circuit Judges Kim McLane Wardlaw and Anthony Johnstone agreed that circuit precedent compelled affirmance, yet both expressed deep reservations about the intrinsic test itself.

Judge Wardlaw characterized the test as having fundamental flaws and suggested the court should consider dispensing with it altogether.[3]

Judge Johnstone traced the doctrine’s evolution, arguing that the intrinsic test has lost meaningful legal content and now permits verdicts unconstrained by copyright law, untethered from statutory limits and Supreme Court guidance.[4]

Their concern is structural, as the test effectively handcuffs appellate courts to jury verdicts finding no infringement. Once a case reaches the intrinsic test, filtering of unprotectable elements effectively disappears, allowing juries to base infringement findings — or nonfindings — on holistic impressions rather than legally cognizable expression.

In Sedlik, the judges suggested, the dispositive role of the intrinsic test overshadowed complex legal questions about protectable photographic choices and cross-medium copying. Thus, appellate courts face significant barriers to reversal, even when the objective evidence suggests otherwise.

Further, this deference creates an asymmetry: While courts can more readily assess objective similarities through the extrinsic test, they must accept jury determinations about subjective impressions even when those determinations appear inconsistent with the objective evidence. The judges suggested this framework may allow clear cases of infringement to escape liability based solely on jury perceptions about total concept and feel.

Implications for Intellectual Property Practitioners

While the intrinsic test remains binding law, Sedlik invites practitioners to reassess litigation strategy in the Ninth Circuit. If the Ninth Circuit moves away from the intrinsic test, copyright litigation strategy would fundamentally change. Currently, defendants benefit enormously from surviving summary judgment and reaching a jury on the intrinsic test question, knowing appellate courts rarely disturb unfavorable plaintiff verdicts.

Eliminating or substantially modifying this framework could shift leverage in settlement negotiations and case evaluation. Plaintiffs should anticipate increased judicial skepticism toward arguments relying heavily on total concept and feel, particularly where protectable expression is thin. Defendants, meanwhile, may find greater receptivity to challenges emphasizing doctrinal drift and the need for principled limits on jury discretion.

Practitioners should also consider how alternative approaches might function. Other circuits employ different frameworks, and the Ninth Circuit could adopt a more unified test that allows greater judicial scrutiny throughout. This might strengthen copyright protection by reducing the risk that objective copying escapes liability through subjective jury determinations.

Strategic Considerations

Copyright litigants in the Ninth Circuit should monitor this issue closely. While two judges’ concerns don’t constitute binding precedent, they signal potential doctrinal evolution. Plaintiffs might emphasize these critiques in briefing, arguing for enhanced judicial review of jury determinations. Defendants, conversely, should prepare arguments defending the intrinsic test’s role in maintaining appropriate jury functions.

The critique also underscores the importance of robust extrinsic test presentations. If courts gain greater authority to review similarity questions holistically, comprehensive expert testimony and objective analysis become even more critical to case outcomes.

Practically, counsel should build records that foreground the extrinsic analysis and preserve arguments questioning the intrinsic test for potential en banc or U.S. Supreme Court review. Summary judgment motions may increasingly emphasize that disputes can — and should — be resolved through objective comparison of protectable elements alone.

More broadly, Sedlik suggests the Ninth Circuit may be poised to recalibrate its approach to substantial similarity, aligning it more closely with statutory text and Supreme Court precedent.

Conclusion

The Ninth Circuit’s willingness to question foundational aspects of its substantial similarity framework suggests copyright jurisprudence in the circuit may be at an inflection point. IP attorneys should prepare for potential doctrinal changes that could reshape litigation strategy and settlement dynamics throughout the region.

[1] Sedlik v. Von Drachenberg , Case No. 24-3367 (9th Cir. 2026).

[2] Sedlik, No. 24-3367 (9th Cir. 2026) (citing Three Boys Music Corp. v. Bolton, 212 F.3d 477, 485 (9th Cir. 2000)).

[3] Sedlik, No. 24-3367 (9th Cir. 2026) (Wardlaw, J., concurring).

[4] Id.

This week, the U.S. Supreme Court denied a petition for writ of certiorari in Zeidman v. Lindell Management LLC, a case involving a $5 million contest promoted by MyPillow founder Mike Lindell. The question in that case was whether “manifest disregard” exists as a standard for vacatur under Section 10 of the Federal Arbitration Act (FAA). The decision not to take up this case is yet another instance of the Court passing up the opportunity to finally resolve one of the most hotly contested questions in arbitration.

Background on Manifest Disregard

A critical phase of any arbitration is its ending. Here, a losing party likely wishes to appeal the arbitrator’s unfavorable decision (in arbitration terms, to seek “vacatur”). On what grounds may that losing party seek vacatur?

Section 10 of the FAA prescribes four “exclusive” grounds for vacatur.[1] First, if the award was “procured by corruption, fraud, or undue means.”[2] Second, if the arbitrator(s) displayed “evident partiality or corruption.”[3] Third, “where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.”[4] And finally, “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”[5]

A primary distinction of arbitration is that errors of law are not grounds for vacatur. The Supreme Court has said that “convincing a court of an arbitrator’s error — even his grave error — is not enough.”[6] In other words, “[t]he arbitrator’s construction holds, however good, bad, or ugly.”[7]

Yet uncertainty has arisen as to whether legal error is entirely off the table. Some courts crafted a standard called “manifest disregard” to vacate arbitration awards based on particularly serious legal error.[8] For example, a court may vacate an award where the arbitrator “knowingly refuse[d] to follow a controlling legal rule.”[9] Even so, the manifest disregard standard has grown confused in the lower courts. What precisely does “manifest disregard” mean? Is it an entirely new ground for vacatur, is it merely a gloss on the Section 10(a) standards, or is it contrary to those standards?

Manifest disregard has created “a deep and intractable division among the courts of appeals.”[10] The U.S. Court of Appeals for the Ninth Circuit requires the party challenging the award to “show that the arbitrator understood and correctly stated the law, but proceeded to disregard the same.”[11] The U.S. Court of Appeals for the Second Circuit requires the party to show “that the arbitrators knew of the relevant legal principle, appreciate that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted the governing law by refusing to apply it,” as well as show that the “disregarded legal principle was ‘well defined, explicit, and clearly applicable.’”[12] The U.S. Court of Appeals for the Fifth Circuit simply “no longer recognizes manifest disregard as a standalone basis for vacatur.”[13]

The issue has grown especially chaotic in New York. In one case, the lower court vacated an arbitration award on manifest disregard grounds, citing “an egregious dereliction of duty on the part of the [arbitrators].”[14] On appeal, the Appellate Division reversed, holding that manifest disregard did not apply because “an arbitral decision even arguably construing or applying the procedural record must stand, regardless of the court’s view of its (de)merits.”[15]

The U.S. Supreme Court has had at least two opportunities to clarify the law. Both times it further muddied the waters. In Hall Street, the Court unhelpfully remarked: “Maybe the term ‘manifest disregard’ was meant to name a new ground for review, but maybe it merely referred to the § 10 grounds collectively, rather than adding to them.”[16] Then, in Stolt-Nielsen, the Court explicitly declined “to decide whether ‘manifest disregard’ survives our decision in [Hall Street] as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10.”[17]

Zeidman v. Lindell Management LLC

The Supreme Court this week again passed up an opportunity to finally bring clarity to this issue.

The Contest: MyPillow creator Mike Lindell presented data that supposedly proved that China helped steal the 2020 presidential election. He created Lindell Management LLC (LMC) to host a contest, offering a $5 million reward to anyone who could prove this data was invalid.

The contest’s Official Rules contained two key provisions. First, contestants had to prove that Lindell’s data “unequivocally” did not “reflect information related to the November 2020 election.”[18] Second, the contest’s judges picked the winner based on the judges’ “professional opinion” that a contestant “prove[d] to a 100% degree of certainty” that Lindell’s data was “not reflective of November 2020 election data.”[19] The Official Rules also contained an arbitration provision.[20]

Robert Zeidman entered the contest and agreed to the Official Rules. He submitted a report concluding that Lindell’s data was invalid because it was not pocket capture (PCAP) data, which is “[d]ata extracted in real time from the internet.”[21] Lindell had repeatedly claimed that his data was PCAP data.[22] Even so, the contest’s judges ruled that Zeidman did not meet his burden and thus did not win the contest.[23]

The Arbitration: Zeidman then filed an arbitration demand. A three-member arbitration panel ruled in Zeidman’s favor, holding that he was entitled to the $5 million reward.[24] The arbitration panel explained that the Official Rules required that the data “must be from the election itself.”[25] LMC argued that “the data need only be connected to or about the election in some way.”[26] The arbitration panel rejected this and reasoned that the only acceptable form of data was PCAP data, as that would be the only kind of data that could literally be “from the election.”[27] Because Zeidman “proved that the files provided were not in PCAP format” and thus not “from the election,” he should have won the contest and the $5 million prize.[28]

The District Court: LMC moved the U.S. District Court for the District of Minnesota to vacate the award on the ground “that the panel acted outside the scope of its authority.”[29] LMC argued that the arbitration panel improperly used extrinsic evidence because the panel decided that PCAP data was the only acceptable form of data, even though the Official Rules did not mention PCAP data at all.[30] The District Court denied LMC’s vacatur motion, explaining that that “[b]ecause the panel was arguably interpreting and applying the contract, even the potentially serious legal error of using extrinsic evidence to interpret an unambiguous term is not enough to vacate the award.”[31]

The Court of Appeals: The U.S. Court of Appeals for the Eighth Circuit reversed and vacated the award, fully embracing the manifest disregard standard.[32] It explained that “an arbitration award may be vacated if it evidences ‘manifest disregard for law’ – if the panel based its decision on ‘some body of thought, or feeling, or policy, or law that is outside the contract.’”[33] By “adding a form-of-data requirement,” the arbitration panel “imposed a new obligation upon LMC, effectively ‘amending the contract.’”[34]

Zeidman filed a petition for writ of certiorari to the Supreme Court. He asked the Court to once and for all answer “[w]hether the [FAA] allows a court to vacate an arbitration decision on the ground that the decision was based on a manifest disregard of the law.”[35] But on January 12, 2026, the Supreme Court denied Zeidman’s petition.[36] The manifest disregard question is thus left undecided, with more uncertainty certainly left to come.

Takeaways

When drafting an arbitration clause, it is important to check where you have designated as the “seat” of the arbitration, as the court will apply the vacatur caselaw of the seat. And when a dispute arises, be sure to check the seat both before and after your arbitration, as your results and the availability of manifest disregard as a ground for vacatur may depend on the circuit in which the arbitration sits.

Whether manifest disregard is a ground for vacatur is still open to interpretation. Until the Supreme Court finally and definitively speaks on it, this issue will continue to split the lower courts and create uncertainty for practitioners, arbitrators, and parties alike.

[1] Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 586 (2008).

[2] 9 U.S.C. § 10(a)(1).

[3] Id. § 10(a)(2).

[4] Id. § 10(a)(3).

[5] Id. § 10(a)(4).

[6] Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 572 (2013).

[7] Id. at 573.

[8] In 1953, the Supreme Court said that “the interpretations of the law by the arbitrators in contrast to manifest disregard are not subject, in the federal courts, to judicial review for error in interpretation.” Wilko v. Swan, 346 U.S. 427, 436–37 (1953) (emphasis added).

[9] Restatement (Third) U.S. L. of Int’l Com. Arb. § 4.20, cmt. G (A.L.I. 2024).

[10] Petition for Writ of Certiorari, Zeidman v. Lindell Mgmt. LLC (2025) (No.25-504), at 13.

[11] HayDay Farms, Inc. v. FeeDx Holdings, Inc., 55 F.4th 1232, 1241 (9th Cir. 2022).

[12] Seneca Nation of Indians v. New York, 988 F.3d 618, 626 (2d Cir. 2021) (citations omitted).

[13] Jones v. Michaels Stores, Inc., 991 F.3d 614, 615 (5th Cir. 2021).

[14] Daesang Corp. v. Nutrasweet Co., 2017 WL 2126684, at *7 (N.Y. Sup. Ct. May 15, 2017).

[15] Daesang Corp. v. Nutrasweet Co., 85 N.Y.S.3d 6, 22 (N.Y. App. Div. 2018) (quoting Oxford Health, 569 U.S. at 569); See also Jeremy Heep & Shouryendu Ray, NY Appellate Court Weakens ‘Manifest Disregard’ Exception to Arbitration Enforcement, JD Supra (Oct. 22, 2018), https://www.jdsupra.com/legalnews/ny-appellate-court-weakens-manifest-67660/.

[16] Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 585 (2008).

[17] Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 n.3 (2010).

[18] Zeidman v. Lindell Mgmt. LLC, 145 F.4th 820, 823 (8th Cir. 2025).

[19] Id.

[20] Id. at 824.

[21] Zeidman v. Lindell Mgmt. LLC, 718 F. Supp. 3d 934, 937 (D. Minn. 2024).

[22] See Bob Zeidman, How I Won $5 Million from the MyPillow Guy and Saved Democracy, Politico (May 26, 2023), https://www.politico.com/news/magazine/2023/05/26/my-pillow-mike-lindell-investigation-00097903.

[23] Zeidman, 145 F.4th at 823.

[24] Id. at 824–25.

[25] Id.

[26] Id. at 824.

[27] Id. at 824–25.

[28] Id. at 825.

[29] Zeidman, 718 F. Supp. 3d at 939.

[30] Id. at 939–40.

[31] Id. at 941.

[32] Zeidman, 145 F.4th at 826–27.

[33] Id. at 827 (quoting CenterPoint Energy Res. Corp. v. Gas Workers Union, Loc. No. 340, 920 F.3d 1163, 1167 (8th Cir. 2019)).

[34] Id. at 828 (quoting Keebler Co. v. Milk Drivers & Dairy Emps. Union, Loc. No. 471, 80 F.3d 284, 288 (8th Cir. 1996)) (citation modified).

[35] Petition for Writ of Certiorari, Zeidman v. Lindell Mgmt. LLC (2025) (No.25-504), at i.

[36] See Caroline Simson, Justices Nix Bid To Revive $5M Lindell Challenge Award, Law360 (Jan. 12, 2026), https://www.law360.com/media/articles/2428769.

The Federal Trade Commission (FTC) announced the annual changes to the Hart-Scott-Rodino (HSR) Act notification thresholds. The HSR Act requires all persons contemplating certain mergers or acquisitions, which meet or exceed the jurisdictional thresholds, to file notification with the FTC and the Department of Justice and to wait a designated period of time before consummating such transactions. These thresholds are adjusted annually based on changes in the U.S. gross national product (GNP). The changes are expected to become effective 30 days after notice is published in the Federal Register.

Generally, the HSR Act requires notification for mergers, acquisitions, joint venture formations, and certain exclusive pharmaceutical license agreements over a certain size among parties over a certain size. The size-of-transaction threshold will increase to $133.9 million from $126.4 million. Transactions that will result in the purchaser holding voting securities, assets, or noncorporate interests valued above that threshold will be reportable if the size-of-parties test is also satisfied and no exemptions apply. The new thresholds also apply to certain exclusive pharmaceutical patent licenses.

The size-of-parties thresholds will also increase. Generally, one party must have sales or assets of at least $26.8 million, and the other party must have sales or assets of at least $267.8 million. Unless an exemption applies, transactions valued in excess of $535.5 million will require premerger notification regardless of the annual sales or assets of the parties.

FTC Announces Changes in Filing Fees

In addition to announcing the new HSR thresholds, the FTC approved publication of the new merger filing fee thresholds. There are six filing fee thresholds based on the size of the transaction:

Filing Fee

2026 Size of Transaction

$35,000

Valued above $133.9 million but less than $189.6 million

$110,000

Valued at or above $189.6 million but less than $586.9 million

$275,000

Valued at or above $586.9 million but less than $1.174 billion

$440,000

Valued at or above $1.174 billion but less than $2.347 billion

$875,000

Valued at or above $2.347 billion but less than $5.869 billion

$2,460,000

Valued at or above $5.869 billion

To determine reportability, parties must apply the thresholds that are or will be in effect at the time of closing. However, the applicable filing fee is based on the filing fee threshold that is in effect at the time the parties submit their HSR filings.

Summary of New HSR Thresholds Is as Follows:

Size-of-transaction threshold:
$126.4 million will become $133.9 million

Size-of-parties thresholds:
$25.3 million will become $26.8 million
$252.9 million will become $267.8 million

Size-of-transaction where size-of-parties no longer relevant:
$505.8 million will become $535.5 million

The HSR regulations are complex and address, among other things, how to determine the size of the person and the size of the transaction and whether an exemption could apply. It is important to be familiar not only with the specific thresholds but also with how the thresholds apply to your transactions.

On January 14, President Trump issued two proclamations under Section 232 of the Trade Expansion Act of 1962 (Section 232) addressing national security risks associated with imports of processed critical minerals and semiconductors. The actions follow U.S. Department of Commerce (Commerce) investigations initiated in 2025 on critical minerals and semiconductors, reflecting an expanded use of Section 232 authorities to reshape supply chains for technologies viewed as essential to U.S. defense, infrastructure, and economic security.

While the proclamations take different approaches — one establishing a pathway for future restrictions and the other immediately imposing tariffs — they together signal heightened trade, compliance, and sourcing risk for companies operating across critical minerals, electronics, artificial intelligence, and semiconductor supply chains. Both actions require continued monitoring by Commerce and contemplate additional trade measures, including potential expansion of tariffs and related incentive structures.

Critical Minerals – No Immediate Tariffs

The first proclamation, “Adjusting Imports of Processed Critical Minerals and Their Derivative Products into the United States” (the Critical Minerals Proclamation), addresses imports of processed critical minerals and their derivative products (PCMDPs). It is based on a Commerce investigation initiated in 2025 that examined U.S. reliance on foreign sources not only for mineral extraction but, more significantly, for processing minerals into usable forms such as rare earth magnets, battery materials, and specialized industrial inputs.

Commerce concluded that the U.S. is fully import-reliant for several critical minerals and at least 50% import-reliant for many others, with domestic processing capacity insufficient even where domestic mining exists. The Critical Minerals Proclamation links these conditions to national security risks stemming from supply disruptions, foreign concentration of processing capacity, and price volatility affecting defense readiness, critical infrastructure, and the broader industrial base.

Still, the Critical Minerals Proclamation does not impose tariffs, quotas, or price controls at this time. Instead, it directs the Secretary of Commerce and the U.S. Trade Representative to negotiate agreements with foreign partners to secure reliable access to PCMDPs. If those negotiations fail to adequately address the identified risks, the administration may consider trade-restrictive measures, including minimum import prices.

Commerce is instructed to monitor PCMDP imports on an ongoing basis, reassess their national security impact, and recommend additional Section 232 actions if warranted. The Critical Minerals Proclamation took effect on January 14, 2026, and requires a report to the President within 180 days on the status of negotiations. No expiration date is specified.

For companies, this creates a period of uncertainty rather than immediate cost increases. Import-dependent manufacturers — particularly in electronics, automotive, batteries, energy, aerospace, and advanced materials — should anticipate increased scrutiny of supply chains and a policy preference for domestic or allied-country processing. Companies may wish to assess exposure to PCMDPs, review contractual allocation of tariff risk, and consider diversification or domestic processing options ahead of potential future restrictions.

Semiconductors – 25% Tariff and Exemptions

The second proclamation released, “Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and Their Derivative Products into the United States” (the Semiconductor Proclamation), addresses semiconductors, certain semiconductor manufacturing equipment, and derivative products, and is based on a Commerce Section 232 investigation initiated in 2025. Commerce found that U.S. dependence on foreign semiconductor supply poses a national security risk, because domestic capacity does not meet projected defense and commercial demand.

The Semiconductor Proclamation notes that the U.S. consumes approximately one-quarter of global semiconductor output but manufactures only a small portion of the chips it uses, even as semiconductors underpin all 16 U.S. critical infrastructure sectors. Particular emphasis is placed on advanced chips used in artificial intelligence and data-center applications, where import patterns are viewed as problematic when they do not support U.S. manufacturing and supply-chain development.

The Semiconductor Proclamation adopts a two-part approach:

  1. It imposes a 25% ad valorem tariff (the Semiconductor Tariff) on specified advanced computing chips and related derivative products identified as “Covered Products” in the annex to the Semiconductor Proclamation and corresponding Harmonized Tariff Schedule of the United States amendments. The Semiconductor Tariff applies to goods entered for consumption, or withdrawn from warehouse for consumption, beginning at 12:01 a.m. ET on January 15, 2026, and remains in effect unless modified.
  2. It directs the Secretary of Commerce and the U.S. Trade Representative to negotiate with key foreign jurisdictions to strengthen U.S. semiconductor production and supply-chain resilience. A report on the status of those negotiations is due to the President within 90 days, and the Semiconductor Proclamation contemplates the possibility of broader, “significant” tariffs on semiconductors, semiconductor manufacturing equipment, and derivatives following the conclusion of negotiations, potentially paired with a tariff-offset or other incentive program for companies that invest in U.S. semiconductor capacity.

Under the Semiconductor Proclamation, the U.S. will collect the 25% duty on a narrow category of advanced AI and computing semiconductors when the chips enter the U.S., even if they are ultimately destined for Chinese customers or other foreign markets; while the administration has, for now, declined to extend tariffs to a broader range of foreign-made chips despite a Section 232 finding of national security harm, the surcharge was announced one day after Commerce’s Bureau of Industry and Security eased licensing criteria for exports of certain AI chips (including H200s) to China and appears to have been a condition for allowing a major U.S. technology company to continue selling into that market.

The Semiconductor Tariff is structured with use-based exemptions to minimize impacts on U.S. technology development and is primarily aimed at imports that support advanced computing infrastructure located outside the U.S., rather than U.S.-based operations. Covered Products are exempt from the Semiconductor Tariff:

  • When used in U.S. data centers;
  • For U.S.-based repairs or replacements;
  • For research and development conducted in the U.S.;
  • By U.S. startups;
  • In non-data-center consumer applications in the U.S.;
  • In non-data center civil industrial applications in the U.S.;
  • In U.S. public-sector uses; or
  • In other uses determined by the Secretary of Commerce to strengthen U.S. technology supply chains or domestic manufacturing capacity.

The exemptions for “non-data-center consumer applications” and “non-data-center civil industrial applications” are drafted in notably broad terms and are not further defined in the tariff action. This breadth creates potential ambiguity as to which specific end uses qualify, and may result in a wide range of products and use cases arguably falling within the exemption, pending additional clarification or implementing guidance from Commerce.

Claiming an exemption is expected to require end-use certifications and supporting documentation, which Commerce and U.S. Customs and Border Protection (CBP) are directed to implement through Federal Register notices, including any necessary changes to tariff classifications and administrative procedures.

The Semiconductor Proclamation also clarifies that Covered Products subject to the Semiconductor Tariff will not be subject to additional Section 232 tariffs on the same goods and that they are excluded from certain International Emergency Economic Powers Act (IEEPA) tariffs, including Reciprocal Tariffs imposed by Executive Order 14257, as amended; Canada Fentanyl/Migration Tariffs imposed pursuant to Executive Order 14193, as amended; and Mexico Fentanyl/Migration Tariffs imposed pursuant to Executive Order 14194, as amended. The Semiconductor Proclamation further clarifies that Covered Products will be subject to the IEEPA China Fentanyl Tariffs imposed pursuant to Executive Order 14194, as amended by Executive Orders 14228, 14256, and 14357, as well as any applicable tariffs issued pursuant to Section 301 of the Trade Act of 1974 and antidumping and countervailing duties.

No duty drawback is permitted, and Covered Products admitted into U.S. foreign trade zones (FTZs) on or after the effective date must generally be treated as privileged foreign status, meaning their tariff classification and duty rate are locked in at admission and the 25% duty will be charged when they are entered into U.S. commerce. Commerce must continue monitoring semiconductor imports and report by July 1, 2026, to the President, with a particular focus on chips used in U.S. data centers, at which point the tariff framework may be revisited.

Key Takeaways

The Critical Minerals Proclamation does not yet impose new duties, but it clearly points toward potential future restrictions on imports of processed critical minerals and their derivatives. Articles at risk in later actions include processed lithium, cobalt, nickel, manganese, and graphite compounds used in batteries; rare earth oxides and salts; rare earth permanent magnets; and specialty alloys and chemical inputs incorporating critical minerals used in electric vehicles, batteries, automotive components, defense systems, electronics, chemicals, and energy infrastructure. Importers and downstream manufacturers in these sectors should expect increased scrutiny of foreign-processed inputs, begin mapping exposure to PCMDPs, and evaluate alternative or “friend‑shored” processing options in case Commerce moves to price floors or tariffs after the 180‑day review.

The Semiconductor Proclamation creates immediate cost and compliance exposure through a 25% tariff on designated “Covered Products,” expected to include high‑performance AI and data‑center chips (e.g., advanced graphics processing units, AI accelerators, certain high‑end processors and modules) and their derivative products. Impacted importers include fabless and integrated device manufacturers bringing advanced chips into the U.S., semiconductor distributors, data‑center and cloud/AI providers importing hardware, original equipment manufacturers, and contract manufacturers importing boards or cards with advanced chips, and FTZ operators handling these items. Because the Semiconductor Tariff is subject to use‑based exemptions (e.g., U.S. data centers, repairs, U.S. research and development, startups, consumer and industrial uses, and public‑sector projects), affected companies must quickly determine whether their products fall within Covered Product classifications and build robust end‑use certification and documentation processes to support exemption claims and withstand CBP or Commerce scrutiny.

Companies that engage early, by reassessing supply chains, tightening compliance controls, and planning for potential escalation in Section 232 measures, are likely to be best positioned to manage risk and capture opportunities as this new trade and industrial policy framework takes shape.

On January 8, the Federal Communications Commission (FCC) announced a landmark enforcement action against satellite and earth-station Service Provider Marlink, Inc., marking the first time the agency has publicly enforced violations of a Team Telecom national security mitigation agreement.

Marlink’s National Security Commitments

According to an FCC Public Notice, Marlink entered into a 2022 Letter of Agreement (LOA) with the Department of Justice (DOJ), acting on behalf of the interagency “Team Telecom” national security review committee, as a condition of its international Section 214 and earth station authorizations. LOAs serve as mitigation instruments to allow the executive branch to address the potential for national security risks introduced by foreign entities either (a) obtaining an FCC license to operate in certain sectors of the U.S. communications networks, or (b) acquiring control of any entity that holds certain types of FCC licenses. In Marlink’s case, its LOA required “strict controls” on foreign-employee access to U.S. communications infrastructure and customer information.

The FCC found that Marlink violated the conditions of its LOA by allowing 186 foreign employees to access U.S. systems and data without DOJ’s prior approval, triggering a referral from DOJ and subsequent FCC Enforcement Bureau (the Bureau) investigation.

What the Consent Decree Means in This Enforcement Action

To resolve the investigation, the Bureau adopted (and Marlink accepted) an Order and Consent Decree that terminates the enforcement proceeding in exchange for significant compliance commitments and a monetary payment to the U.S. Treasury Department. Under the Consent Decree, which operates as a negotiated settlement, Marlink agreed to pay a $175,000 “voluntary contribution,” implement revised access controls for foreign personnel, and adopt a robust compliance plan designed to prevent any recurrence of LOA violations. The Bureau expressly tied the settlement to Marlink’s “basic qualifications” to hold FCC authorizations, underscoring that failures to comply with Team Telecom mitigation conditions can call into question a licensee’s ongoing fitness to operate under the Communications Act (47 U.S.C. § 151, et seq.). The FCC has rescinded international telecommunications licenses from other foreign-owned operators in the past, primarily due to national security concerns.

As is typical, in entering into the Consent Decree, the FCC does not make a formal determination that Marlink willfully or repeatedly violated the act or the FCC’s rules. Marlink neither admits nor denies the Bureau’s findings, but waives certain rights (including to contest the Bureau’s jurisdiction and to seek further administrative or judicial review) and Marlink accepts detailed compliance commitments. Practically speaking, this means the enforcement matter is closed, but Marlink remains under heightened scrutiny: any future noncompliance with the Consent Decree or its LOA could prompt additional investigation and/or enforcement, potentially including higher penalties or challenges to its authorizations.

What This Means for Current and Future Team Telecom Applicants

The Marlink Consent Decree highlights several important compliance themes for telecommunications licensees subject to Team Telecom oversight:

  • Team Telecom mitigation agreements are not mere paperwork; they are binding license conditions enforceable by the FCC, with DOJ with its other Team Telecom member agencies (including the Department of Homeland Security and Department of Defense) playing an active monitoring role.  
  • Foreign-employee access to U.S. communications infrastructure and customer information remains a central national security concern. The Consent Decree emphasizes “unauthorized foreign-employee access” as the core violation, and the remedial measures focus on granular access controls, procedures to obtain DOJ approval before granting such access, internal audits, and reporting obligations.  
  • This action underscores the expectation that companies have mature compliance programs — policies, training, monitoring, and escalation — to operationalize their LOA commitments and detect potential violations early.  

Existing licensees should expect closer coordination between DOJ (as Team Telecom chair) and the FCC’s licensing bureaus, with referrals of potential noncompliance leading to formal investigations. Licensees subject to LOAs should proactively reassess their controls around foreign personnel, data localization, logging and monitoring of access, vendor management, and incident response, as well as any other LOA conditions imposed.

For companies considering transactions or applications that are likely to trigger Team Telecom review — such as foreign investment in U.S. telecommunications assets, international Section 214 authorizations, satellite and earth-station licenses, or submarine cable projects — Marlink’s negotiated settlement is likely to be a roadmap for future executive branch expectations. Applicants should anticipate that LOAs will include detailed, enforceable commitments regarding foreign access, data security, and cooperation with national security agencies. The lesson from this enforcement action is clear: mitigation conditions are “live” obligations that can generate real enforcement risk if not implemented and maintained over the life of the license.

Please do not hesitate to contact us if you have any questions concerning transactions or activities that may implicate Team Telecom review, or existing LOAs you may be subject to. Troutman’s team of professionals has significant experience in regulatory compliance, including with respect to telecommunications, national security, international transactions, foreign investment, and related areas.

On January 13, the U.S. Court of Appeals for the Ninth Circuit issued a decision in Howard v. Republican National Committee (RNC) offering two important interpretations of the applicability of the Telephone Consumer Protection Act (TCPA) to certain text message communications:

  1. Text messages are “calls” under the TCPA.
  2. A text message that merely includes a video file with a prerecorded voice — requiring the recipient to press play — does not constitute “initiating” a “call using an artificial or prerecorded voice.”

Background

The plaintiff received a text message from the RNC that included a video file that was automatically downloaded to the recipient’s phone. The plaintiff claimed this violated the TCPA’s restrictions on: (1) calls to cell phones; and (2) calls to residential lines “using an artificial or prerecorded voice.” The district court dismissed the complaint and the Ninth Circuit affirmed.

  1. Text Messages as “Calls” Under the TCPA

The Ninth Circuit held that a text message is a “call” for TCPA purposes. The court relied on precedent explaining that “call” means an attempt to communicate by telephone, and “text messaging plainly fits within that literal definition” because it is a form of communication between telephones. The court emphasized that its conclusion rests on the statute’s plain language, independent of any deference to Federal Communications Commission guidance, particularly after the Supreme Court’s decision in Loper Bright. The court reasoned that texts trigger the same kind of immediate privacy intrusion as voice calls.

  1. Embedded Video Files Are Not “Prerecorded Voice Messages”

The more novel issue was whether a text message that includes a video file is a prohibited “call using an artificial or prerecorded voice.” The court began by reaffirming that “voice” in the TCPA means audible sound, not text alone. However, the court held that sending an embedded video did not constitute “making” or “initiating” a call “using … an artificial or prerecorded voice.” Looking to ordinary dictionary definitions, the court determined that these provisions regulate how the call begins. From that, the court concluded that the TCPA limits the use of artificial or prerecorded voices to begin a call, not any subsequent, optional use of a recording once the connection is established. Because the plaintiff’s voluntary decision to press play was an intervening step, any playing of the prerecorded voice was not part of the manner in which the call was made or initiated.

Judge Rawlinson dissented from the prerecorded‑voice portion of the court’s decision. She would have held that the text plus automatically downloaded video was a single “call” that used an artificial or prerecorded voice within the statute’s plain language. In Judge Rawlinson’s view, the TCPA prohibits “any call” made “using an artificial or prerecorded voice,” and does not require that the prerecorded voice be what initiates the call.

Key Takeaways

Text campaigns remain squarely within TCPA “call” territory.

  • Text messages continue to be treated as “calls.”
  • Consent, revocation, and opt‑out practices for text messages should be aligned with TCPA standards for calls.

Embedded video is not automatically a “prerecorded call” in the Ninth Circuit.

  • A text that includes a video is not, by itself, a “call using an artificial or prerecorded voice” if the video’s audio plays only after the recipient chooses to press play.

Risk assessment across jurisdictions

  • Howard is a Ninth Circuit decision. Other courts may approach embedded content differently and the dissent in Howard signals a competing interpretation plaintiffs may invoke.

Updated on 2/23/2026

New York enacted several new employment laws that went into effect at the end of 2025 or will take effect in early 2026. These laws include a prohibition on employment promissory notes as a condition of employment, increases to the minimum wage and exempt salary threshold, a codification of disparate impact discrimination, and the prohibition on the use of credit checks for employment purposes. In addition, New York City expanded its Earned Safe and Sick Time Act (ESSTA) in several key respects. These collectively add a considerable burden on employers with employees in New York but, if steps are taken to meet or sidestep these new laws, companies can avoid needlessly exposing themselves to workplace liability.

Prohibition on “Employment Promissory Notes” as a Condition of Employment

The Trapped at Work Act, effective December 19, 2025, prohibits employers from requiring as a condition of employment what is referred to in the act as “employment promissory notes.” The new law defines that term as any agreement that requires a worker to pay the employer money if the worker leaves the job before the expiration of a specified time period. A common type of employment promissory note is an agreement that requires an employee at the time of hiring to repay training costs if the employee voluntarily resigns before a particular anniversary (typically no less than six months and sometimes as long as 18 to 24 months).

The Trapped at Work Act not only applies to new employment promissory notes, but also to existing “stay or pay” agreements, which the law now treats as void and unenforceable.

The act protects not only employees, but also independent contractors, interns, and volunteers.

The act includes the following exceptions for certain types of repayment agreements entered into as a condition of employment: payroll advances and similar agreements for sums advanced to the worker by the employer (except for training costs); for property sold or leased to the worker; sabbatical leave agreements for educational employees; and agreements entered into with the worker’s collective bargaining representative.

The new law provides for fines of $1,000 to $5,000 per violation, which would be issued by the New York Department of Labor. Although there is no private right of action, if a worker successfully defends a lawsuit by an employer to enforce an unlawful employment promissory note, the worker can recover attorneys’ fees.

The statutory language is unclear as to the full scope of the term “employment promissory note.” For example, a sign-on bonus repayment agreement and a retention bonus repayment agreement may be outside the coverage of the act, especially where entered into outside of a condition of employment or where entered into voluntarily by the employee. In addition, the act is unclear as to whether it covers repayment arrangements for tuition assistance for certain degrees, licenses, or certificates that enhance employability within the industry generally. The governor, in approving the new law, flagged these ambiguities and conditioned her approval on legislative amendments in 2026. In the meantime, employers may wish to couch such agreements in one or both of those contexts to sidestep the applicability of this new law.

February 23, 2026, update: The following is an update to our discussion of the new law governing employment promissory notes.

New York recently amended the Trapped At Work Act, making several key changes at the request of Governor Kathy Hochul. First, the law’s effective date has been postponed to December 19, 2026, extending the original effective date by one year. The legislature also amended the act’s coverage — while it originally protected employees, independent contractors, interns, and volunteers, the act is now limited to only employees.

The amendments also clarify that repayment agreements for tuition, fees, and educational materials relating to “transferable credentials” are permitted. Transferable credentials are defined as degrees, licenses, certificates, and other demonstrations of proficiency that are widely recognized by employers as a qualification for employment that is independent of the employer’s specific business practices or that enhance the employee’s employability with other employers in the relevant industry. Such a repayment agreement (1) must be in writing, separate from an employment contract; (2) must specify the repayment amount and provide for pro-rated repayment during any required employment period; (3) cannot require accelerated payment if the employee separates employment; and (4) cannot require repayment if the employee is terminated for any reason other than misconduct. The amendments also clarify that employers are permitted to enter into repayment agreements for a financial bonus, relocation assistance, or other noneducational incentive or other payment or benefit that is not tied to specific job performance. However, repayment cannot be required if the employee is terminated for any reason other than misconduct, or if the duties or requirements of the job were misrepresented to the employee.

Finally, the amendments give aggrieved employees the right to file a complaint with the New York commissioner of labor.

Increase to Minimum Wage and Exempt Salary Threshold

Employers in New York are well aware that the minimum wage rate has increased. Effective January 1, 2026, the minimum hourly rate increased to $17 per hour for New York City as well as Nassau, Suffolk, and Westchester counties, and $16 per hour for all other parts of the state. Most employers are also aware that the weekly exempt salary threshold for administrative and executive employees increased to $1,275 per week ($66,300 per year) for New York City and Nassau, Suffolk, and Westchester counties, and to $1,199.10 per week ($62,353.20 per year) for all other parts of the state.

This increase may impact a number of workers who were classified as exempt in 2025 when the threshold for exemption was about $2,000 less per year. Notably, if an employer chooses not to increase the worker’s salary to at least the threshold, the worker must then be paid on an hourly basis, with overtime pay for all hours worked over 40 in a workweek. Such a change may also implicate the state’s pay notice law, in which case an employer should provide the worker with a new pay notice under Labor Law section 195(2), and adjust the pay stub information to account for hours worked, including any overtime hours worked. A failure to do so may expose the employer to a $5,000 penalty per worker under the wage notice law and a separate $5,000 penalty per worker for a pay stub that does not account for regular and overtime hours.

Codification of Disparate Impact

Effective December 19, 2025, the New York State Human Rights Law was amended to codify the disparate impact theory of discrimination. As such, under the Human Rights Law, “an unlawful discriminatory practice may be established by a practice’s discriminatory effect, even if such practice was not motivated by a discriminatory intent.” Although Title VII of the Civil Rights Act of 1964 recognizes disparate impact claims, President Donald Trump has directed the Equal Employment Opportunity Commission to cease pursuit of such claims under Title VII, so the federal status of disparate impact claims is uncertain.

Essentially, this amendment to the Human Rights Law is not a change in the law, but rather simply a statutory codification and reaffirmation of existing law.

Prohibition on Use of Consumer Credit Checks in Employment Decisions

Effective April 18, 2026, pursuant to an amendment to the New York Fair Credit Reporting Act, employers will no longer be permitted to request or use consumer credit history (including credit reports, credit scores, and bankruptcies, liens, or judgments) of an applicant or employee for employment decisions.

The new law provides for some exceptions in the private sector, including when an employer is required by a government agency to use credit history for employment purposes, and for positions that: have signatory authority over third-party funds or assets of $10,000 or more; involve a fiduciary responsibility to the employer with the authority to enter financial agreements of $10,000 or more; have regular access to trade secrets (provided the person is not in a non-clerical position): and allow modification of digital security systems to prevent the unauthorized use of networks or databases of the employer or the employer’s client.

Since 2015, New York City law prohibits most employer credit checks under the Stop Credit Discrimination in Employment Act. A number of the exemptions under this new state law amendment to the state’s Fair Credit Reporting Act closely mirror those under City law. New York City employers must therefore continue to apply the law with the greater employee protection. Thus, as a practical matter, New York City employers may not need to change their current practices when the state law becomes effective.

Does this new state law amendment apply to employers who seek employees from New York for work located out of state? The law is unclear, but prudent employers may be wise to refrain from requesting or using consumer credit history and information for any applicant that lists their address within the State of New York.

Expansion of New York City Earned Sick and Safe Time Act

Effective February 22, 2026, an amendment to the ESSTA will require city employers to provide employees with 32 hours of unpaid safe and sick time immediately upon hire and at the start of each calendar year. This imposes a significant burden on employers, as the 32 hours is in addition to the existing requirements for 40 or 56 hours (depending on employer size) of paid safe and sick time per year. In contrast to the accrual method, which only allows employees to take time that they have earned, all employees will now be entitled to 32 unpaid hours immediately upon hire and each year. The law does not provide for proration based on hire date, so even an employee hired in December is granted the full 32 hours. Employers cannot impose any waiting period for usage. Just as with paid time, the unpaid time must be tracked (amount used and amount available) and included on pay stubs, or otherwise provided to employees each pay period.

The amendment does provide some relief for employers — it eliminates the requirement under the New York City Temporary Schedule Change Law that requires employers to allow two schedule changes for certain personal events.

The law also provides that the 32 hours of unpaid time can only be used if paid sick and safe time is unavailable (presumably because the employee either has not accrued sufficient time or has reached the employer’s annual use cap), or if the employee has specifically requested to use the unpaid leave. In other words, a general request for sick and safe leave defaults to the use of paid leave, if available.

In addition, employers are not required to permit employees to carry over from year to year any accrued but unused unpaid leave. Employers may also require unpaid leave be used for no less than four hours in a single day.

The qualifying reasons for which ESSTA can be used will also be expanded under the amendment to include:

  • Caregiving for a minor child or care recipient, which is defined as a person with a disability (including a temporary disability) who is the caregiver’s family member or resides in the caregiver’s household, and relies on the caregiver for medical care or to meet the needs of daily living;
  • Pursuit of subsistence benefits or housing for the employee, a family member, or care recipient; and
  • A “public disaster” resulting in closure of the employee’s workplace, child’s school or childcare provider, or a directive from public officials to remain indoors or avoid travel.

ESSTA currently covers reasons stemming from a “public health emergency.” Thus, this amendment expands that reason to cover a broad range of “public disasters” including fires, explosions, terrorist attacks, severe weather, or other emergencies declared by the president, New York governor, or New York City mayor.

Conclusion

Employers should review relevant policies and procedures (pay practices, background checks, sick leave policies, and any employee agreements with repayment provisions) to ensure they comply with the recent changes. You may also reach out to your Troutman Pepper Locke employment counsel for assistance in complying with these new workplace obligations.

This article was originally published on Law360 and is republished here with permission as it originally appeared on January 14, 2026.

What goes on behind the scenes before and after a law firm merger announcement? As the pace of mergers picks up, this Law360 Expert Analysis series explores strategies for effectively navigating various aspects of the process, with insights from practitioners at firms that have recently merged.

In this installment, Troutman Pepper Locke LLP Managing Partner Amie Colby stresses the importance of intentional relationship-building in the merger process, and how an early, structured approach can yield measurable success, following Troutman Pepper Hamilton Sanders LLP’s merger with Locke Lord LLP a year ago.

Successful law firm mergers are often built on compatible practices, financial alignment and similar cultures. But the real work comes with bringing people together early enough, and with enough structure, to create the relationships that will drive collaboration.

That process shouldn’t wait for the merger to close. It needs to begin as soon as the possibility of a combination is on the table.

At our first Troutman Pepper Locke partner retreat in September 2025, I shared a number that captured the room’s attention. Only nine months after our merger, 86% of our top 100 clients were being served by attorneys from both legacy firms.

This did not happen by chance. It was the result of more than a year of intentional effort to bring people together, build trust and create structures for collaboration.

For us, it was proof that the merger wasn’t just about combining headcounts or practice groups. It was about integrating teams in a way that directly benefited our clients.

With two major mergers in the last five years, we have learned several lessons about what it really takes to bring people together — lessons that may help other firms chart their own course.

Starting Early

When Troutman Sanders and Pepper Hamilton merged in 2020, the pandemic forced us to navigate integration through computer screens. Partners and teams who would normally spend time getting to know one another in person had to build trust virtually.

While we ultimately succeeded in uniting the firm, we also saw how difficult it was to create real connection without the benefit of shared, in-person experiences.

That merger taught us an important lesson: Build relationships before the deal closes. In the early days of merger discussions, people are already looking for signs of what the future will feel like, and whether it will truly be one firm or just two groups under a shared name.

With that in mind, when Troutman Pepper and Locke Lord announced in April 2024 that we were considering a merger, we did not wait to start the integration process. Over the summer, we brought hundreds of partners from both firms together in more than 80 meetings, deliberately creating opportunities for connection before a formal vote was even held.

If we could have brought together even more people, we would have. Every meeting built familiarity, trust and momentum that made the merger feel real before it was official.

These conversations helped establish not only a shared vision for the combined firm but also personal connections that supported collaboration from day one.

Creating Purposeful Connection

One of the easiest mistakes in any merger is assuming that if you simply put people together, collaboration will follow. However, new colleagues may hesitate to reach out, unsure of the right way to connect or whom to connect with in the larger organization.

That is why we believed integration could not be left to chance. It had to be guided with structure and purpose.

Throughout 2024 and into 2025, we built intentional forums where partners could not only meet but also work together on shared business goals. Each of our pre-merger collaboration meetings had a structure, where partners learned more about each other and their practices and worked together to identify growth opportunities.

These meetings were supported by our business development and practice management teams, who translated those discussions into formal growth plans for our practices. One of the many benefits of these numerous meetings was that it sparked strong engagement from our partners who looked for ways to collaborate across firms before the merger was finalized.

Our integration efforts also extended to our professional staff. We began connecting administrative teams across functions — from finance and operations to talent and IT — so they could start planning together and aligning their approaches.

This not only accelerated the operational transition but also gave professionals in every role a chance to feel part of the new firm from the beginning.

The lesson was clear: Don’t just hope integration will happen; create intentional pathways for it. Whether through structured meetings, collaborative workshops, or cross-team projects, a framework helps make connections natural and productive.

Communicating Through Change

Integration depends not only on structure and opportunity but also on communication. During our 2025 merger, we made communication a strategic pillar of change management. We wanted to keep people informed, confident and focused on collaboration rather than uncertainty.

We built a data-driven communication strategy that met people where they were. Using a mix of traditional updates, internal platforms and AI-enabled tools, we delivered timely answers to common questions about systems, processes and next steps.

Dashboards and analytics helped us see what information teams were looking for most, allowing us to anticipate needs and adjust messaging quickly.

This approach reduced confusion and built trust. When people understand what’s happening and how to find answers to their questions, they have more space to focus on what matters most: working together to serve clients.

Measuring Success Through Clients

At the end of the day, the real test of integration is not how many meetings you hold or how many retreats you organize. Success comes when lawyers are working together in ways that matter for clients.

Culture and connection are essential, but for law firm leaders, the most tangible measure of success is client outcomes.

For us, that proof came in the data. Our metrics show that all of our top 100 clients are being served by multiple practice groups, and nearly all are being served across legacy firm lines.

That is measurable collaboration. We have also seen increases in cross-firm pitches, new client relationships, and growth with existing clients.

These numbers matter because they confirm what we had hoped to achieve: intentional integration of teams translating into stronger collaboration for clients.

The lesson is clear. If you build the structures that help your people connect and collaborate, your clients will benefit.

Closing

Mergers are complex. They involve countless decisions about structure, systems and strategy. But in our experience after two mergers in five years, what ultimately determines success is whether people come together as one firm.

That does not happen automatically. It takes foresight, planning and steady leadership that keeps people connected to a shared purpose.

Our approach was to start early, involve as many partners as possible, and create structures that guided collaboration. Along the way, we saw the cultural benefits of stronger relationships and deeper trust.

But what truly validated the effort was seeing clients respond, with more joint engagements, more growth, and more confidence in what we could deliver together.

For firm leaders facing the challenge of integrating teams after a merger, the lesson is simple: Don’t leave connection to chance. Build it into the process from day one, and keep reinforcing it at every opportunity.

The result is more than just a unified firm culture, it is a platform for lasting client success.


Amie Colby is a managing partner at Troutman Pepper Locke LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

State attorneys general increasingly impact businesses in all industries. Our nationally recognized state AG team has been trusted by clients for more than 20 years to navigate their most complicated state AG investigations and enforcement actions.

State Attorneys General Monitor analyzes regulatory actions by state AGs and other state administrative agencies throughout the nation. Contributors to this newsletter and related blog include attorneys experienced in regulatory enforcement, litigation, and compliance. Also visit our State Attorneys General Monitor microsite.

Contact our State AG Team at StateAG@troutman.com.

Podcast Updates

From Vegas to Venezuela: High-Stakes Predictive Markets

By Stephen C. Piepgrass and Lu Reyes

In this episode of Regulatory Oversight, host Stephen Piepgrass, who leads Troutman Pepper Locke’s Regulatory Investigation Strategy and Enforcement (RISE) practice, is joined by partner Lu Reyes for a deep dive into the national security and enforcement implications of predictive markets. The discussion centers on a headline‑grabbing Polymarket trade that appeared to anticipate former Venezuelan President Nicolás Maduro’s capture and yielded roughly $400,000 in profit, raising questions about insider trading and classified information leaks.

Listen here

AI, Algorithms, and Accountability: Unpacking the Colorado AI Act with Senator Rodriguez

By Ashley L. Taylor, Jr. and David Stauss

In this episode of Regulatory Oversight, host Ashley Taylor is joined by Colorado Senate Majority Leader Robert Rodriguez and Troutman Pepper Locke Privacy + Cyber partner David Stauss for an in‑depth discussion of the Colorado AI Act — widely viewed as the nation’s first comprehensive legislative framework focused on high‑risk AI systems and algorithmic discrimination. Senator Rodriguez explains how Colorado’s work on consumer privacy laid the groundwork for AI regulation and walks through the origins, goals, and core provisions of the Act, including its emphasis on transparency, risk assessments, and protecting consumers in sectors such as employment, housing, health care, education, finance, and government services.

Listen here

Multistate AG News

Menards Settles Multistate Investigation Involving Well-Known Rebate Program

By Troutman Pepper Locke State Attorneys General Team

Last month, Ohio and nine other state attorneys general (collectively, the AGs) entered into an assurance of voluntary compliance (AV) with Menard Inc. d/b/a Menards, a Wisconsin-based home improvement retailer. The settlement resolved the AGs’ allegations concerning deceptive rebate advertising and price gouging during the COVID-19 pandemic. Menards will pay $4.25 million to the multistate group, in addition to making several changes primarily related to the company’s rebate and advertising business practices.

Read more

Single State AG News

Minnesota Attorney General Sues Nonprofit and President for Alleged Governance Violations

By Troutman Pepper Locke State Attorneys General Team

On January 6, Minnesota Attorney General (AG) Keith Ellison filed a lawsuit against the Minnesota nonprofit corporation Act for Cause (AFC) and its president, Rajesh Mehta. While the stated mission of AFC was to help needy individuals with securing employment and housing, the lawsuit alleges that Mehta used the charity for various self-dealing purposes.

Read more

New York AG Targets Monterey Finance Over Allegedly Deceptive Lease-to-Own Financing

By Troutman Pepper Locke State Attorneys General Team

On December 23, 2025, the New York Attorney General (AG) announced a settlement with Monterey Finance (Monterey) of approximately $2.4 million in debt relief for 835 New York consumers and $175,000 in penalties. The AG alleged that Monterey disguised high-cost lease agreements as traditional consumer financing, causing consumers to pay more than the sticker price for goods and services they believed they were purchasing.

Read more

Texas AG Settlement With Hyatt Reinforces Pricing Transparency Commitment

By Troutman Pepper Locke State Attorneys General Team and Sydney Goldberg

On December 30, 2025, Texas Attorney General (AG) Ken Paxton announced a $1.25 million settlement with Hyatt Corporation (Hyatt). The settlement resolves a 2023 lawsuit alleging that Hyatt violated Texas consumer protection laws by requiring consumers to pay mandatory fees on top of advertised room rates. Under the agreement, Hyatt must clearly disclose any required fees added to a hotel room’s price, reinforcing Texas’s push for transparent online hotel pricing.

Read more

New York Expands Consumer Protection Law Giving the AG Broader Powers

By Troutman Pepper Locke State Attorneys General Team, Joseph DeFazio, William D. Foley, Jr., Stefanie Jackman, Lori Sommerfield, Chris Willis, and Shawn Brenhouse

On December 19, 2025, New York Governor Kathy Hochul signed into law the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act. The FAIR Act, which was proposed by Attorney General (AG) Tish James, represents the first major update to the state’s primary consumer protection law in 45 years and significantly broadens the statute’s reach.

Read more

AG of the Week

Kris Mayes, Arizona

Kris Mayes serves as Arizona’s 27th attorney general (AG). Prior to her election as AG, Mayes held a senior role in the Napolitano administration in the early 2000s and was appointed to the Arizona Corporation Commission. She won two statewide elections and served as a commissioner from 2003 to 2010, including as commission chair from 2009 to 2010.

During her tenure on the Arizona Corporation Commission, Mayes led efforts that contributed to the creation of tens of thousands of jobs, saved Arizona consumers billions of dollars, and required utilities to increase production of clean and efficient energy, including solar and wind. She also worked to preserve Arizona’s water resources.

Before her election as AG, Mayes was a professor at Arizona State University’s School of Global Sustainability and taught energy law at the Sandra Day O’Connor College of Law at ASU.

Upcoming AG Events

  • January: AGA | Human Trafficking Training | Virtual  
  • February: RAGA | Victory Fund Retreat | Big Sky, MT  
  • February: DAGA | Policy Conference | San Francisco, CA  

For more on upcoming AG Events, click here.

Troutman Pepper Locke’s State Attorneys General team combines legal acumen and government experience to develop comprehensive, thoughtful strategies for clients. Our attorneys handle individual and multistate AG investigations, proactive counseling and litigation, and manage ancillary regulatory issues. Our successful approach has been recognized by Chambers USA, which ranked our practice as a leader in the industry.