The Delaware Court of Chancery’s latest refusal to enforce overbroad non-compete and nonsolicitation provisions, even in the sale-of-business context, confirms that if a restrictive covenant exceeds the edge of a legitimate and protectable interest, buyers cannot rely on Delaware courts to blue-pencil them back to safety.

Background

In BluSky Restoration Contractors, LLC v. Robbins & Popwell, the Delaware Court of Chancery found noncompetition, nonsolicitation, and confidentiality covenants arising out of the acquisition of a restoration company to be unreasonable, and refused to reform any of them. The decision should serve as a cautionary tale: if covenants go beyond the “competitive space reached by the seller” and the “buyer’s legitimate economic interests,” they may be struck rather than saved.

BluSky acquired a Tennessee‑based restoration and mitigation company with a regional footprint and hired its co‑founders (defendants) into senior roles. Restrictive covenants were included in (1) the equity purchase agreement (EPA), (2) employment agreements (EAs) the defendants entered into in connection with the acquisition, and (3) incentive unit agreements that were granted post-closing by BluSky’s parent to the defendants (RCAs). The restrictive covenants were drafted to protect not only the acquired regional business, but the buyer, the buyer’s parent, and their affiliates, in some cases across different geographic territories and business lines. When the defendants later formed a competing company in Tennessee, BluSky filed suit for breach of the restrictive covenants and sought injunctive relief. Defendants moved to dismiss, which was granted by the court.

Analysis and Holdings

In opposition to the motion to dismiss, BluSky argued that the non‑competes in the EPA and EAs deserved more lenient scrutiny because they were tied to the sale of a business. The court acknowledged that “[r]estrictive covenants are subject to a less searching inquiry in the sale of a business than in an employment contract.” However, the court also recognized that in the context of a sale of a business, covenants still must be tailored to the “competitive space reached by the seller and serve the buyer’s legitimate economic interests.” Here, that business was a regional Tennessee restoration company, so the legitimate interest was protecting that regional goodwill and footprint. The court found that both agreements exceeded the acquired company’s regional reach, and that the purchase price or compensation paid to the defendants did not justify either a nationwide or worldwide restriction.

The court also held that the customer and employee nonsolicitation provisions were unenforceable. Indeed, the EPA, EAs, and RCAs prohibited not only actually hiring employees or diverting customers, but also “attempts to induce” employees to leave or “attempts to persuade” customers not to do business with the plaintiff. Following recent Delaware precedent, the court treated this “attempt to” language as overbroad because it captured noncompetitive conduct.

The court also addressed the inclusion of “affiliates” within the definition of certain terms applicable to the nonsolicitation restriction. The court found that it resulted in restrictions becoming broader than necessary to protect what the court deemed the plaintiff’s legitimate interests and greater than what was reasonable based on the purchase price.

As to the breach of confidentiality and return-of-materials provisions, BluSky urged the court to treat those restrictive covenants as ordinary contract clauses, not subject to the same strict reasonableness limits as non-compete and non‑solicit provisions. The court declined to do so, noting instead that Delaware courts evaluate confidentiality covenants under the same basic framework where they effectively operate as restrictive covenants. The court noted that the confidentiality provisions applied during and after employment, often with no fixed end date or lasting until information became public, and they were drafted to cover categories of nonpublic information about the buyer, its parent, and their affiliates. The court did not find that the lack of a temporal limitation was determinative. However, the court still deemed the provision to be overbroad and focused on the inclusion of “affiliates” in the definition, which extended the scope beyond the confidential information to which the defendants would have access.

Having found that the restrictive covenants in each of the agreements were unenforceable due to overbreadth, the court then declined BluSky’s request that it blue‑pencil the covenants to a reasonable scope. The court noted that doing so would “eliminate the goal [of] requiring parties to draft restrictions specifically tailored to the parties’ circumstances and legitimate business interests” and “incentivize future parties to compose restrictions without appropriate accuracy and precision.”

Without enforceable restrictive covenants, the court denied BluSky’s preliminary injunction because it found that BluSky could not prove that it was likely to succeed on the merits.

Takeaways

The decision underscores that buyers and employers cannot count on Delaware courts to repair overbroad restrictive covenants after the fact. When drafting non‑competition, non‑solicitation, and confidentiality clauses under Delaware law, buyers and practitioners should consider the following guidelines to increase the likelihood of enforcement:

  • Tailor restrictive covenants to the acquired business’s geographic footprint. Limit the scope of the non‑competes and non‑solicits to the acquired business’s actual geographic and product/service footprint.
  • Be intentional with affiliates. Consider whether it is necessary to include affiliates and other corporate business lines in the scope of the restrictive covenant. Including unspecified and unrelated affiliates greatly increases the risk of the restrictive covenants being unenforceable as overly broad.
  • Avoid drafting restrictive covenants that prohibit “attempts” to do something. Focus on concrete competitive conduct rather than sweeping prohibitions on “attempts” of competitive conduct that risk being deemed overbroad.
  • Draft confidentiality clauses like a restrictive covenant. Narrowly define protected information, consider reasonable time limits, and re-examine “as broadly as possible” formulations.
  • Do not rely on blue penciling. Given the severe consequences of the Chancery court’s refusal to blue-pencil the agreements — here, denial of injunctive relief and dismissal of all claims — it is important to carefully draft restrictive covenants with the goal of enforceability without need for reformation by the court.

This article was originally published on American Bar Association and is republished here with permission as it originally appeared on March 10, 2026.

Courts nationwide have carefully examined what is “reasonable” in the face of a challenge under either the reasonable procedures requirements for initial reporting under the, found in 15 U.S.C. § 1681e(b), or the dispute reinvestigation requirements of the FCRA, found in 15 U.S.C. § 1681i. In the context of dispute reinvestigations, a deceptively simple question lies at the center of this body of law: Could the inaccuracy have been uncovered through a reasonable reinvestigation? As the U.S. Court of Appeals for the First Circuit has explained, “[t]he decisive inquiry” is whether the defendant could have discovered the alleged inaccuracy “if it had reasonably reinvestigated the matter.” DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir. 2008) [login required et seq.]; see also Suluki v. Credit One Bank, NA, 138 F.4th 709, 723 (2d Cir.FairCredit Reporting Act (FCRA)2025) (affirming summary judgment to defendant “[b]ecause no reasonable investigation would have led to a different result).

Although the answer to this question appears straightforward, its application becomes far more complex given the variety of fact patterns in which alleged inaccuracies may arise. As the case law has unfolded, courts have begun to center on the following general rule: if the disputed inaccuracy is not “objectively and readily verifiable,” furnishers and consumer reporting agencies (CRAs) cannot be held liable under the FCRA for failing to discover the inaccuracy prior to initial reporting or during a reinvestigation in response to a dispute. The U.S. Court of Appeals for the Second Circuit, for example, has made clear that reported information is actionably “inaccurate” under section 1681e(b)—the provision governing initial reporting procedures—only if it is “objectively and readily verifiable by the CRA.” Sessa v. Trans Union LLC, 74 F.4th 38, 42 (2d Cir. 2023). Courts have applied the same limitation to claims that a CRA failed to conduct a reasonable reinvestigation of a consumer dispute brought under section 1681i(a), Reyes v. Equifax Info. Servs., L.L.C., 140 F.4th 279, 287 (5th Cir. 2025), as well as claims that a furnisher of credit information failed to conduct a reasonable investigation in response to a dispute brought under section 1681s-2(b), Holden v. Holiday Inn Club Vacations Inc., 98 F.4th 1359, 1368 (11th Cir. 2024).

The Central Role of Reasonableness

The statutory touchstone for both sections 1681e(b) and 1681i(a) is reasonableness. Section 1681e(b) requires CRAs to “follow reasonable procedures to assure maximum possible accuracy,” and section 1681i(a) requires them to conduct a reasonable reinvestigation when a consumer disputes information. Courts have consistently interpreted these provisions through a practical lens that accounts for the institutional role and limitations of CRAs. Additionally, although the word reasonable does not explicitly appear in section 1681s-2(b)—the provision through which furnishers are obligated to “conduct an investigation with respect to the disputed information” upon receiving notice of an indirect dispute from a CRA—courts have recognized that the duty imposed by this provision on furnishers also turns on reasonableness. See, e.g., Holden,98 F.4th at 1363; Roberts v. Carter-Young, Inc., 131 F.4th 241, 249 (4th Cir. 2025)

As the U.S. Court of Appeals for the Fourth Circuit recently reiterated, “an investigation into the accuracy and completeness of information in a credit report must be reasonable.” Roberts, 131 F.4th at 251. Reasonableness, however, does not demand perfection, nor does it require CRAs and furnishers to transform themselves into adjudicative bodies. The Roberts court emphasized that “[r]equiring [dispute] investigations that resemble full court proceedings would not be reasonable.” Id. at 251 n.6 (citing Mader v. Experian Info.Sols., Inc., 56 F.4th 264, 271 (2d Cir. 2023)); Sessa, 74 F.4th at 42–43. In adopting this logic, courts have made clear that CRAs and furnishers alike “are not expected to function like full tribunals.” Roberts, 131 F.4th at 251 n.6.

This limitation reflects both practical reality and statutory design. CRAs operate as intermediaries that collect and report information supplied by furnishers. They are not equipped with subpoena power, the ability to compel testimony, or the institutional authority to resolve complex factual disputes or unsettled legal questions. And while furnishers of information have the direct relationship to the consumer and are the holder of the account—giving them more information from which to draw when conducting an investigation—furnishers also have limited knowledge, tools, and resources to investigate consumers’ disputes, and their investigatory power can only go so far. This difference in the roles and relative positions of furnishers and CRAs has led some circuit courts to conclude that “the furnisher of credit information stands in a far better position to make a thorough investigation of a disputed debt than [a consumer reporting agency] does,” so the FCRA “will sometimes require furnishers to investigate, and even to highlight or resolve, questions of legal significance”; but even so, there are acknowledged limits to the types of disputes that a furnisher can reasonably be expected to be able to resolve. Holden, 98 F.4th at 1368 (collecting cases).

Objectively and Readily Verifiable Information

In a case involving a furnisher, the U.S. Court of Appeals for the Eleventh Circuit continued to refine the distinction between actionable and nonactionable disputed inaccuracies. See Holden, 98 F.4th at 1368–69. There, the court explained that “purely factual or transcription errors” or a “straightforward application of law to facts” qualifies as “objectively and readily verifiable” information. Id. Conversely, information that “stems from a . . . dispute without a straightforward answer” does not. Id. Similarly, the U.S. Court of Appeals for the Seventh Circuit has recognized that matters such as “the amount a consumer owes” or “what day a consumer opened an account or incurred a payment” fall squarely within the category of objectively and readily verifiable information. Chuluunbat v. Experian Info. Sols., Inc., 4 F.4th 562, 568 (7th Cir. 2021). These are concrete, historical facts that can typically be confirmed—or corrected—by a reasonable reinvestigation. On a related but separate issue, the U.S. Court of Appeals for the Eighth Circuit recently held that a defendant’s obligation to investigate a dispute is necessarily limited to what the defendant “learned about the nature of the dispute from the description” provided with the dispute; thus, a “more limited investigation may be appropriate” when the defendant receives only “vague or cursory information about the consumer’s dispute.” Johnson v. Freedom Mortg. Corp., 165 F.4th 1128, 1131 (8th Cir. 2026) (citing Chiang v. Verizon NewEng. Inc., 595 F.3d 26, 38 (1st Cir. 2010)).

In contrast, disputes that require complex fact-gathering, credibility determinations, or in-depth legal analysis involve information that is not objectively and readily verifiable. As Roberts explains, “a dispute that “involves complex fact-gathering and in-depth legal analysis of the sort that courts would typically perform” falls outside the CRA’s mandate. Nor are CRAs or furnishers required to resolve unsettled legal questions or assess allegations of tortious conduct, such as claims of fraud or retaliation, which demand subjective evaluation of the parties’ actions. Roberts, 131 F.4th at 251.

Ownership and Legal Validity Disputes

Ownership disputes provide a useful illustration of these principles and how to draw the “objectively and readily verifiable” line. As the Eleventh Circuit explained in Rozov v. Bank of America, N.A.:

  • [W]hen a consumer claims a debt is not owed, the nature of the dispute determines whether it is actionable under the FCRA. Sometimes, such a claim presents a purely factual issue—for example, where a consumer contends that the furnisher misidentified him by using the wrong Social Security number. In those circumstances, the dispute may be objectively verifiable.

2025 WL 1620921, at *2 (11th Cir. June 9, 2025) .

Other circuits have echoed this limitation. The U.S. Court of Appeals for the Fifth Circuit has held that CRAs “are not required to investigate the legal validity of disputed debts under the FCRA.” Reyes, 140 F.4th at 287. Similarly, the Seventh Circuit has observed that a CRA “is neither qualified nor obligated to resolve [legal issues] under the FCRA.” Denan v.Trans Union LLC, 959 F.3d 290, 296 (7th Cir. 2020).

The U.S. Court of Appeals for the Ninth Circuit articulated the same principle in Carvalho v. Equifax Information Services, LLC, explaining that determining whether a consumer has a valid defense to enforcement of a debt instrument “is a question for a court to resolve in a suit against the [creditor], not a job imposed upon consumer reporting agencies by the FCRA.” 629 F.3d 876, 892 (9th Cir. 2010).

The Limits of the Collateral Attack Doctrine

It is important to understand the current state of the law in the context of historical precedent. Specifically, the cases discussed above evolved from an earlier line of cases often referred to as the “collateral attack doctrine.” That line of cases held that while consumers may not use the FCRA as a vehicle to litigate the legal validity of an underlying debt or to force CRAs to adjudicate complex disputes better suited for courts, CRAs and furnishers governed by the FCRA must still fulfill their statutory obligations to use reasonable procedures for ensuring accuracy in their reporting and for investigating disputes. As the case law has evolved from its roots in the collateral attack doctrine and into the modern holdings regarding objectively and readily verifiable inaccuracies, courts have steered away from a bright-line rule that “legal disputes” can never amount to an actionable inaccuracy under the law. See Sessa, 74 F.4th at 40.

This doctrinal boundary protects both the integrity of the credit reporting system and the proper allocation of institutional roles. CRAs and furnishers must correct objectively verifiable inaccuracies when alerted to them, but they are not arbiters of contractual defenses, fraud claims, or unsettled questions of law and cannot be held to that standard. Where a dispute turns on such issues, the appropriate forum is a court of law in a direct action against the creditor or furnisher.

Conclusion

In short, liability under the FCRA hinges not merely on whether information is disputed, but on whether the alleged inaccuracy is one that a CRA or furnisher could reasonably uncover and verify. The “objectively and readily verifiable” standard, culminating from decades of case law developed by courts grappling with the concept of “reasonableness” in this context, serves as the dividing line between actionable reporting errors and impermissible collateral attacks on underlying legal obligations.

Published by the American Bar Association ©2026. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

On March 19, 2026, a group of eight state attorneys general (AGs) filed a lawsuit to block the $6.2 billion acquisition of Tegna Inc. by Nexstar Media Group, two of the largest American broadcast companies. The suit came after federal regulators cleared the transaction, sharpening an increasing divide between the administration and states’ views on the same transactions.

Background

Nexstar Media Group, Inc. is the largest broadcast company in the U.S., “with more than 200 owned or partner stations in 116 U.S. markets reaching 220 million people.”[1] Tegna Inc. is one of Nexstar’s larger competitors, holding a portfolio of its own comprising “64 television stations in 51 U.S. markets” reaching “more than 100 million people monthly.”[2] In August 2025, the parties agreed to a $6.2 billion acquisition of Tegna by Nexstar.[3] The deal would leave Nexstar with ownership of 265 television stations in 44 states, reaching at least 60–80% of American households.[4]

President Donald Trump supported the transaction, remarking that it “will help knock out the Fake News because there will be more competition, and at a higher and more sophisticated level.”[5] On March 19, 2026, the Federal Communications Commission (FCC) approved the deal, stating that “approving the deal . . . will promote the FCC’s longstanding media policy goals of competition, localism, and diversity.”[6] In so doing, the FCC waived its rule limiting a company’s broadcast reach to 39% of American households.[7] FCC Chairman Brendan Carr explained that the rule is “an agency rule, not a firm statutory limit,” and “[w]aiving that rule here is consistent with longstanding FCC authorities” and promotes the FCC’s goals.[8] In the FCC’s view, this acquisition would allow “local broadcast TV stations” to compete with “the powerful Big Four national programmers . . . Comcast, Disney, Paramount, and Fox.”[9] The Department of Justice (DOJ) unconditionally cleared the deal, but it has not yet released a public statement.[10]

AGs from eight states with Democratic AGs — California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon, and Virginia — filed a lawsuit in the U.S. District Court for the Eastern District of California, seeking a permanent injunction to block the transaction.[11] The plaintiff-states argue the acquisition would violate Section 7 of the Clayton Act,[12] which prohibits an acquisition where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”[13] The complaint alleges that the transaction would eliminate head-to-head competition between two of the largest broadcast companies, after which “Nexstar will follow its historical pattern of newsroom consolidation, and viewers . . . will lose options for where to get their local TV news.”[14]

California AG Rob Bonta predicted that “[t]his merger would cause incredibly high levels of concentration in local TV markets and is expected to raise cable and satellite prices across the country, causing irreparable harm to local news and consumers.”[15] New York AG Letitia James said that “[t]his illegal merger threatens local news and could raise fees for consumers.”[16] Several federal lawmakers also spoke out against the FCC’s approval of the deal.[17] Competitors and newsrooms took issue as well.[18] DIRECTV also sued Nexstar and Tegna,[19] asserting similar claims and pointing out that the deal would leave distributors like DIRECTV with less bargaining power when negotiating licenses with Nexstar.[20]

Takeaways

In just the second year of the second Trump administration, a trend is emerging: state AGs are not deferring to federal regulators when conducting antitrust investigations. Recently, the DOJ settled with Live Nation while states have pressed ahead in their monopolization case; also, a group of states have intervened in the “Tunney Act” judicial review process for the DOJ’s settlement in a merger action involving Hewlett Packard Enterprise and Juniper Networks, claiming the settlement was “ineffective” and “corrupt.” While the first Trump administration had instances of divergence, including a losing state challenge to the T-Mobile-Sprint combination, this trend appears to be growing.

Companies looking to complete transactions that have state implications should be aware of this trend. As an initial step, companies should assess whether any affected state has a Hart‑Scott‑Rodino Act analogue, commonly known as a “mini‑HSR” requirement, that could bring the transaction to the attention of state enforcers. Importantly, companies in this position should have a plan for how to advocate before the state AGs.

This is just the latest episode in the clash between states and the federal government over the proper interpretation and enforcement of antitrust laws.

[1] Stations, Nexstar Med. Grp., https://www.nexstar.tv/stations/.

[2] Press Release, Nexstar Media Grp., Nexstar Media Group, Inc. Enters Into Definitive Agreement to Acquire TEGNA Inc. for $6.2 Billion in Accretive Transaction (Aug. 19, 2025), https://www.nexstar.tv/nexstar-media-group-inc-enters-into-definitive-agreement-to-acquire-tegna-inc-for-6-2-billion-in-accretive-transaction/.

[3] Id.

[4] Daniel Arkin, FCC Green-Lights Nexstar’s $6.2B Merger with Rival TV Station Owner Tegna, NBC News (Mar. 19, 2026), https://www.nbcnews.com/business/media/fcc-greenlights-nexstars-62b-merger-rival-tv-station-owner-tegna-rcna237953; Natalie Sherman, Trump-Backed Television Merger Moves Forward, BBC (Mar. 20, 2026), https://www.bbc.com/news/articles/cx2dndp7z12o.

[5] Gregory Svirnovskiy, Trump Strains Conservative Media Alliances in Push for Nexstar-Tegna Merger, Politico (Feb. 7, 2026), https://www.politico.com/news/2026/02/07/trump-nexstar-tegna-merger-00770466.

[6] Press Release, Fed. Commc’ns Comm’n, FCC Empowers Local Broadcast TV Stations (Mar. 19, 2026), https://docs.fcc.gov/public/attachments/DOC-419971A1.pdf.

[7] See id.; see also FCC Broadcast Ownership Rules, Fed. Commc’ns Comm’n, https://www.fcc.gov/consumers/guides/fccs-review-broadcast-ownership-rules.

[8] Press Release, supra note 6.

[9] In the Matter of Applications for Consent to the Transfer of Control of TEGNA Inc. to Nexstar Media Inc., DA 26-267 (Mar. 19, 2026), https://docs.fcc.gov/public/attachments/DA-26-267A1.pdf.

[10] Nexstar’s $3.5 Billion Tegna Deal Cleared by US DOJ, Bloomsberg News Report, Reuters (Mar. 19, 2026), https://www.reuters.com/business/media-telecom/nexstars-35-billion-tegna-deal-cleared-by-us-doj-bloomberg-news-reports-2026-03-19/. Note that the “$3.5 billion” quoted in the title appears to be incorrect, as Nexstar itself reported the deal was worth $6.2 billion, see Press Release, supra note 2, as do the litigants discussed here, see Complaint for Permanent Injunction, infra note 11, and Complaint for Injunctive Relief, infra note 18.

[11] Complaint for Permanent Injunction, California v. Nexstar Media Grp., Inc., No. 2:26-at-00487 (E.D. Cal. Mar. 18, 2026), https://ag.ny.gov/sites/default/files/court-filings/ca-v-nexstar-complaint-2026.pdf. The plaintiff-states sued under Section 16 of the Clayton Act, which allows one to seek injunctive relief “against threatened loss or damage by a violation of the antitrust laws.” 15 U.S.C. § 26.

[12] Complaint for Permanent Injunction, supra note 10, at ¶ 15.

[13] 15 U.S.C. § 18.

[14] Id. ¶ 72.

[15] Press Release, Off. Cal. Att’y Gen., Attorney General Bonta Files Lawsuit Seeking to Block $6.2 Billion Nexstar/Tegna Broadcasting Merger (Mar. 18, 2026), https://oag.ca.gov/news/press-releases/attorney-general-bonta-files-lawsuit-seeking-block-62-billion-nexstartegna.

[16] Press Release, Off. N.Y. Att’y Gen., Attorney General James Sues to Stop Nexstar-Tegna Merger (Mar. 19, 2026), https://ag.ny.gov/press-release/2026/attorney-general-james-sues-stop-nexstar-tegna-merger.

[17] See, e.g., Press Release, Michael Bennet, Senator, U.S. Senate, Bennet, Neguse Slams FCC for Sidestepping Federal Law to Approve $6.2B Nexstar-Tegna Merger (Mar. 20, 2026), https://www.bennet.senate.gov/2026/03/20/bennet-neguse-slams-fcc-for-sidestepping-federal-law-to-approve-6-2b-nexstar-tegna-merger/.

[18] See, e.g., Svirnovskiy, supra note 5 (reporting that Newsmax CEO Chris Ruddy said, “The Nexstar deal means dangerous consolidation that will limit competition, harm conservative voices and dramatically increase consumer cable bills”); Nexstar Closes $6.2 Billion Tegna Deal, Consolidating Several San Diego TV News Stations Under One Owner as Layoff Fears Grow, SanDiegoVille (Mar. 20, 2026), https://www.sandiegoville.com/2026/03/nexstar-closes-62-billion-tegna-deal.html.

[19] See Complaint for Injunctive Relief, DIRECTV, LLC v. Nexstar Media Grp., Inc., No. 2:26-at-00488 (E.D. Cal. Mar. 18, 2026), https://variety.com/wp-content/uploads/2026/03/DIRECTV-Nexstar-Tegna-Complaint.pdf.

[20] Id. ¶ 109–16.

This article was originally published on March 25, 2026 in Carrier Management and is republished here with permission.

As more insurers integrate aerial imagery into underwriting, rating and claims workflows, state insurance departments are responding with a growing body of guidance. While each insurance department bulletin reflects local law and priorities, a fairly consistent regulatory narrative is emerging—one that accepts the technology but insists on disciplined, fair and transparent use.

Insurers’ Uses of Aerial Imagery

On the underwriting and pricing side, insurers use imagery to get a clearer picture of the risk without always dispatching an inspector. Underwriters use this information to refine eligibility decisions, adjust coverage terms and set more risk‑appropriate premiums. Insurers can confirm building footprints, number of stories, outbuildings, additions and other structures on the parcel. That helps correct misreported or outdated information, align coverage limits with actual exposure and improve rating accuracy.

Over time, periodic imagery allows insurers to monitor changes—for example, a new garage or shed, a newly installed pool, or accumulating debris and lack of maintenance between policy terms. These changes may trigger underwriting review, risk‑mitigation outreach to the policyholder or adjustments at renewal.

In claims handling, aerial imagery is valuable after catastrophes. By comparing pre‑event and post-event images, insurers can quickly gauge the extent of damage across large areas, prioritize inspections and route adjusters to the most severely affected properties. In some cases, insurers can verify roof or structural damage remotely, speeding up claim decisions and payments. The same comparisons can also help flag inconsistencies or potential fraud where claimed damage does not align with what the imagery shows.

Finally, many insurers are feeding aerial images into analytics and AI models. Computer‑vision tools translate raw imagery into structured data—such as roof condition scores, defensible space metrics or hazard indicators—that underwriters and claims teams can use at scale. These scores may influence underwriting tiers, inspection decisions or claim triage rules, making aerial imagery not just a visual aid but a foundational data source in modern property insurance operations.

Common Themes in the State Insurance Guidance

Insurance regulators generally acknowledge that aerial imagery—whether captured by satellite, fixed-wing aircraft or drones—can improve efficiency, reduce inspection costs and enhance risk evaluation. The message is not “don’t use it” but “don’t rely on it blindly.”

Across jurisdictions, state insurance departments emphasize that aerial imagery should typically be one input among several, not the sole basis for cancellations, nonrenewals, declinations or significant rating changes. Where imagery is ambiguous, outdated or low quality, regulators expect insurers to seek additional information, often via a traditional on-site inspection, before taking adverse action.

Quality and Recency of Images

A recurring theme is the importance of the quality and recency of the images themselves. Insurance regulators have expressed concern that imagery can easily mischaracterize a risk: structures may be obscured by trees or shadows, misaligned, or even mis-identified; older images may bear little resemblance to current conditions.

Some regulators are now referencing or considering specific expectations around image recency, and most stress that companies must exercise due diligence to ensure that any imagery used is sufficiently accurate, current and appropriately interpreted.

Risk vs Cosmetic Issues

Another focus is the distinction between risk and cosmetic issues. Several insurance department bulletins caution against using aerial images to justify adverse action based solely on what appear to be cosmetic roof or property conditions—such as staining, streaking, discoloration or minor aesthetic flaws.

Regulators are urging insurers to reserve adverse underwriting outcomes for conditions that materially increase the risk of loss, rather than superficial issues that may not affect the property’s integrity or hazard profile.

Consumer Communication

Transparency and consumer communication are central to this regulatory trend. When aerial imagery leads to an adverse action, many insurance departments now expect insurers to provide specific, meaningful reasons in their notices, rather than generic references to “underwriting judgment” or “hazard increase.”

In some states, regulators encourage or effectively require insurers to share the underlying images or, at a minimum, clearly describe the conditions identified so policyholders understand what prompted the decision. There is also an emphasis on providing insureds with a reasonable opportunity to cure—such as making repairs or removing debris—before a cancellation or nonrenewal is finalized.

Consumer Dispute Mechanism

Closely related is the expectation that consumers have a mechanism to dispute aerial imagery-based findings. Where a policyholder challenges the insurer’s interpretation or presents contrary evidence (for example, a contractor’s report), insurance regulators increasingly expect insurers to follow up, often with a physical inspection, before maintaining an adverse position.

This dispute-and-confirmation step is emerging as a regulatory “best practice” when the imagery is not clearly conclusive.

Use Must Conform to Existing Statutory and Regulatory Frameworks

Finally, state insurance bulletins repeatedly tie use of aerial imagery back to existing statutory and regulatory frameworks. If imagery influences underwriting or rating, regulators expect to see that reflected in filed underwriting guidelines and rating plans, not deployed informally or inconsistently.

And the use of imagery remains fully subject to unfair trade practices, anti-discrimination and consumer protection laws. Insurance regulators are signaling that they will scrutinize image-based practices that result in unfair, unsupported or opaque outcomes.

Taken together, these themes point to a clear policy direction for the insurance industry. Aerial imagery is viewed as a legitimate and useful tool that can modernize underwriting and claims handling. However, insurers are expected to embed guardrails: validating image quality and recency; distinguishing material risk from cosmetic appearance; documenting standards in filed rules; providing clear notice and an opportunity to cure; and allowing challenges backed by follow-up inspection where appropriate.

For insurers, aligning with these emerging expectations is not simply a compliance exercise. It is also an opportunity to standardize and defend internal practices, improve customer experience, and reduce regulatory friction as aerial imagery and related analytics become more deeply integrated into the insurance life cycle.

Interplay between the NAIC AI Model Bulletin and the State Specific Aerial Imagery Guidance

The NAIC’s Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (NAIC AI Model Bulletin) and the growing body of state insurance department bulletins on aerial imagery are part of the same regulatory story: both aim to put guardrails around data‑driven underwriting and claims tools so that they are accurate, fair and accountable. The connection is not just conceptual. For many insurers, aerial imagery is now fed into AI or advanced analytic systems—computer vision models that “read” roof condition, vegetation or external hazards and then inform underwriting, pricing or claim decisions.

The NAIC AI Model Bulletin effectively is the overarching governance framework for those systems, while the aerial‑imagery bulletins are issue‑specific applications of similar principles.

The NAIC AI Model Bulletin sets a high‑level obligation: don’t run AI models on bad data. The aerial imagery bulletins specify what “bad data” looks like in this context and require insurers to validate image quality and recency before using it in underwriting and claims—especially when AI or image‑scoring tools are involved.

The NAIC AI Model Bulletin says insurers cannot outsource accountability; they must manage vendor AI and data as if it were their own. Aerial imagery bulletins apply the same idea: insurers remain responsible for how vendor imagery and scoring are used and must build those standards into filed rules and internal controls. A computer‑vision model that systematically downgrades older roofs in certain neighborhoods or misreads shadows as damage can create systematic disparities.

The NAIC AI Model Bulletin provides the framework for testing and monitoring such models; the aerial imagery bulletins set substantive boundaries on when imagery‑based “signals” may be used at all (e.g., not for cosmetic issues, not without confirmation). The AI Bulletin sets a general expectation that regulators should be able to understand and review an insurer’s AI. The aerial imagery bulletins give examiners specific hooks: they can ask to see how imagery is integrated into underwriting rules, how often it leads to adverse actions, whether images are current and adequate, and how disputes and inspections are handled.

In other words, the NAIC AI Model Bulletin is the umbrella policy, and the state aerial imagery bulletins are specific applications of that policy to a high‑risk, high‑visibility use case.

Aligning the insurer’s aerial‑imagery program with both sets of expectations is increasingly the regulatory baseline for responsible use of these tools.

State by State: Regulatory Guidance of Insurance Use of Aerial Imagery

Our eMerge team is excited to share the following updates:

Troutman eMerge offers clients integrated legal, technology, and AI-enhanced services to address complex data-driven problems in litigation, transactional and compliance matters, government investigations, and information governance initiatives. eMerge’s attorneys have received numerous accolades from leading industry authorities, including Chambers USA and Legal 500. Click here to access eMerge’s full library of thought leadership, webinars, and other key resources.

Data Retention Benchmarking Survey

How long is your company retaining emails? Teams chats? Channels? AI prompts? Meeting recordings? EVERYONE wants to know — across industries. We happily share directional trends when advising clients, but we could all benefit from a more data-driven approach to provide better benchmarking. Please take a moment to complete this brief, two-minute survey, and we’ll share the anonymized results with you.

Case Study: Fast, Focused, Defensible: AI-Powered Review for an Urgent NDA Inquiry

When a client received allegations of a potential NDA breach, executive leadership needed a defensible assessment within 72 hours. The client sought a clear picture of:

  • whether sensitive information had been shared outside the organization,
  • which individuals were involved, and
  • how serious the exposure might be.

More than 20,000 documents from multiple mailboxes needed to be analyzed in 72 hours, a near-impossible task for manual review.

Solution:

eMerge used attorney-directed AI with a workflow that included:

  • de-duplication and email threading,
  • targeted search criteria, and
  • aiR for Review to prioritize the most likely responsive documents.

Outcome:

Within three days, we reduced a 20,249‑document set down to just 131 key documents for detailed review. The team completed the project for under $15,000, delivering roughly 75% cost savings and accurate results in days instead of weeks.

Spotlight: From Chaos to Control: Key Pillars of Collaboration Site Data Governance
 

As collaboration platforms become increasingly central to how organizations work, information governance programs must evolve to keep pace. At eMerge, we’ve structured our recommendations around three core pillars:

  • Retention Management. Collaboration tools vary widely in their retention and disposition capabilities, with more robust features often limited to higher license tiers. Effective governance means accounting for both messages and files stored within these platforms.
  • Site Administration and Governance. Centralize site creation, require approvals, and promote intuitive naming conventions. Giving users free rein leads to sprawl, inconsistency, and security gaps.
  • Employee Training and Policy Development. Everyone needs to know how to use these tools correctly and to recognize that their communications are auditable and discoverable. Update your acceptable use policies to make this explicit.

Principal Jason Lichter, Director of Information Governance Advisory Services Jennifer Knox, and Director of Legal Technology Antonio Avant explored these pillars in our recent webinar. Click here to watch the recording.

Awards and Recognition

Troutman eMerge Earns ISO 42001 AI Governance Certification
Troutman eMerge is one of the only legal technology and eDiscovery providers — including law firm subsidiaries — to have achieved ISO 42001 certification, the first internationally recognized, auditable framework for responsible AI governance. Learn more.

Finalist: 2026 Legalweek Leaders in Tech Law Awards
Troutman eMerge was shortlisted in two categories — E-Discovery Technology and Innovation and Best Use of Artificial Intelligence — while Troutman Pepper Locke earned a nod for Innovations in Knowledge Management. The awards, presented by Legaltech News, recognize organizations at the forefront of legal innovation. Read more.

Finalist: The American Lawyer 2025 Industry Awards — Best Client-Law Firm Team
 Troutman eMerge has been recognized for its longstanding collaboration with Zurich North America, delivering measurable results through legal advocacy, disciplined matter management, and technology-enabled workflows. The award honors client-firm partnerships that translate legal work into real business outcomes. Read more.

Relativity Honors Troutman eMerge and Antonio Avant for Leadership in AI-Powered Case Strategy

Dual Recognition Underscores Firm’s Practical, Results-Focused Use of Generative AI to Enhance Case Strategy and Client Service.

Troutman eMerge and Antonio Avant were recognized by Relativity, a leading legal data intelligence company, for their leadership in leveraging its generative AI-powered case intelligence solution, aiR for Case Strategy. Learn more.

Events and Speaking Engagements

Annual eDiscovery Updates Webinar
Please join our panel of practicing lawyers as we analyze last year’s key discovery decisions and technical innovations and highlight trends for this year. We will discuss the latest developments in privilege protection and preservation when using generative AI tools, practical considerations when balancing legal requirements with rapidly changing AI and other technologies, and the ongoing impact of collaboration and messaging applications. We will also share practical tips from our experience across matters and industries addressing these concerns. Click here to register.

Practical Guidance for Navigating Generative AI Ethics and Risk
Managing Partner Alison Grounds, Partner David Stauss, Chief Intake and Conflicts Officer Jessica Davis, and Senior Attorney Jennifer Doran explored the ethical use of generative AI in legal practice — covering sanctions and discovery risks, human verification strategies, court declaration requirements, and managing client expectations around AI use. View the recording.

The Sedona Conference Working Group 6 Annual Meeting
Principal Jim Calvert contributed to “The Evolution of Discovery and Disclosure Laws in Key Jurisdictions Around the World,” examining recent changes shaping global discovery. Learn more.

Generative AI in Discovery: Where Do We Go From Here?
Principal Jason Lichter will moderate a panel at The Sedona Conference Working Group 1 Midyear Meeting 2026, exploring current and future AI use cases in discovery and whether existing rules and case law provide adequate guidance. Learn more.

2026 NWHA Annual Conference
Managing Partner Alison Grounds and Hydropower Partner Elizabeth McCormick spoke on hydropower innovation and the evolving regulatory landscape. Read more.

Best Practices for AI Review and Production of Voluminous ESI
Managing Partner Alison Grounds joined panelists from Relativity, Illinois Farm Bureau, and Kelly Law Partners at the IADC 2026 Midyear Meeting to discuss planning and execution strategies for collecting and producing large-scale ESI from varied data sources. Read more.

Gwen Tawresey, Greg Len, and Gillian Schutt, two partners and an associate in Troutman Pepper Locke’s Intellectual Property Practice Group, were published in the March 24, 2026 Bloomberg Law for their article, “Bankruptcy Setbacks Offer a Chance for Strategic Success in IP.”

In Fortis Advisors LLC v. Krafton, Inc., the Delaware Court of Chancery recently held after trial that an acquiror breached an equity purchase agreement by terminating key employees without valid “cause” and seizing operational control of the acquired company in an effort to avoid a nine-figure earnout obligation. The court granted specific performance, reinstating the company’s CEO and equitably extending the earnout testing period by 258 days to account for the wrongful ouster. The decision could have significant implications for the structuring and enforcement of earnout provisions, “for cause” termination protections, and operational control rights in acquisition agreements.

Background

South Korean gaming conglomerate Krafton, Inc. acquired Unknown Worlds Entertainment, developer of the Subnautica video game franchise, in October 2021 for $500 million upfront plus up to $250 million in contingent earnout payments tied to revenue performance through a defined testing period ending December 31, 2025. The equity purchase agreement (EPA) guaranteed that three “key employees,” co-founders Charlie Cleveland (Cleveland) and Max McGuire (McGuire), and CEO Ted Gill (Gill), would retain operational control of the studio during the earnout period and could only be terminated “for cause.” The EPA defined “cause” narrowly to include a felony conviction, an “intentional act of fraud or dishonest[y],” “a willful act or omission . . . that constitutes gross misconduct,” or “an intentional, wrongful disclosure of trade secrets or confidential information.”

Over time, Cleveland and McGuire transitioned into reduced roles and agreed to reduced salaries. Their transitions were communicated to Krafton’s senior personnel. Gill continued as CEO overseeing studio operations and the development of Subnautica 2. By spring 2025, as Subnautica 2 neared its planned early access launch, Krafton’s internal financial projections showed that a successful release would generate between $191.8 million and $242.2 million in earnout payments. Krafton’s CEO, who had personally led the acquisition, became concerned that the payout would damage his reputation and consulted an AI chatbot for strategies to avoid the obligation. Krafton formed an internal task force, internally called Project X, to either negotiate a reduction of the earnout or execute a corporate takeover of the studio.

On July 1, 2025, Krafton terminated all three key employees, citing a single reason: their “intention to proceed with a premature release of Subnautica 2.” Krafton then locked the studio out of its Steam publishing platform, blocked the game’s release, and replaced the key employees with Krafton representatives. Fortis Advisors LLC, as shareholder representative for Unknown Worlds’ former stockholders, sued for breach of the EPA and sought specific performance.

The Court’s Analysis of ‘Cause’

The court found that Krafton failed to establish that the key employees were terminated for “cause” as defined in the EPA. At trial, Krafton abandoned its original stated reason for the terminations (the “premature release” justification) and instead advanced two alternative theories: (1) that Cleveland and McGuire’s role transitions constituted “intentional acts of dishonesty” because they concealed their reduced involvement from Krafton, and (2) that the key employees’ downloading of company files to personal devices in the weeks before their terminations was independently terminable misconduct. The court rejected both theories.

On the role transitions, the court held that these were “transparent maneuvers rather than deliberate acts of deception.” The court found that Cleveland and McGuire openly communicated their evolving roles to Krafton’s senior personnel over a period of years, that Krafton processed their voluntary salary reductions through its own HR systems, and that Krafton’s assigned studio liaison witnessed the transitions firsthand. The court construed the EPA’s “intentional act of dishonesty” language to require a specific intent to deceive, not merely a deliberate act that happened to result in a breach, distinguishing Hexion Specialty Chemicals, Inc. v. Huntsman Corp., which addressed the distinct phrase “knowing and intentional breach.”

As to the data downloads, the court found that the key employees’ actions were “protective measures, lacking the requisite intent to deceive.” The employees downloaded company files in anticipation of a hostile corporate takeover, kept the data confidential, and promptly returned it upon request. The court noted that the employees had access rights to the materials under the company’s bylaws and that the EPA itself permitted use of confidential information to monitor their rights under the agreement.

The Court Further Rejected Krafton’s New Justifications for Termination

Beyond its substantive analysis of “cause,” the court addressed Krafton’s litigation strategy of advancing successive post hoc justifications for the terminations:

  • Mend-the-hold doctrine. The court applied the mend-the-hold doctrine, under which a party that has asserted one ground for its contractual position cannot switch to a different, inconsistent justification during litigation. Krafton’s initial termination letters cited only the key employees’ intention to proceed with a “premature release.” When that justification collapsed, Krafton pivoted to the role transitions and data downloads. The court found this shifting impermissible.  
  • After-acquired evidence doctrine. The court held that Krafton could not rely on the after-acquired evidence doctrine to retroactively justify the terminations based on facts discovered after the firing decision had already been made. The court observed that when an employer faces a contractual payout it wishes to avoid, it is heavily incentivized to search through an employee’s history for any pretext to declare the termination was “for cause.” The court stated that it would not permit a party to use the after-acquired evidence doctrine to fabricate “cause” where the evidence showed the termination decision was made for different reasons.  

Remedies

The court enforced the EPA’s express provision that irreparable harm would result from any breach and that the nonbreaching party was entitled to specific performance, and ordered the following:

  • The court ordered the reinstatement of Gill as CEO of Unknown Worlds with full operational authority, effective immediately. The court declined to reinstate Cleveland and McGuire, finding that restoring Gill alone was sufficient to vindicate the sellers’ operational control rights under the EPA.  
  • Injunction against interference. The court enjoined Krafton from circumventing the EPA’s operational control provision or impeding Gill’s authority over the early access launch of Subnautica 2, and ordered Krafton to immediately restore Gill’s access to the Steam publishing platform.  
  • Board resolution declared ineffective. The July 1, 2025, board resolution through which Krafton seized control of the studio was declared ineffective to the extent it infringed on Gill’s operational control right.  
  • Equitable extension of the earnout period. The court equitably extended the earnout testing period by 258 days, the duration of Gill’s wrongful ouster, moving the base deadline from December 31, 2025, to September 15, 2026, with Fortis retaining its contractual right to further extend the period to March 15, 2027.  

The court acknowledged that Gill’s reinstatement would create tension between the parties given “the obvious bad blood,” but held that this did not excuse a material breach of contract or override the bargained-for performance obligations. The court reserved damages and the question of whether Krafton deliberately impaired the earnout for a second phase of the litigation.

Takeaways

This decision could have broad implications for acquirors, sellers, and practitioners involved in structuring and enforcing acquisition agreements with earnout and key employee provisions:

  • “For cause” definitions may be strictly construed. Acquirors should not expect courts to apply “cause” definitions flexibly when the economic incentive to terminate is transparent. Where the EPA narrowly defines “cause,” the court will likely hold the acquiror to those terms. Practitioners should draft “cause” definitions with precision, understanding that each prong, particularly concepts like “intentional act of dishonesty,” will be parsed according to its plain meaning, and that “intentional” modifies the dishonesty itself, not merely the underlying act.  
  • Post-hoc justifications for terminations face heightened scrutiny. The court’s application of the mend-the-hold and after-acquired evidence doctrines signals that acquirors who terminate key employees and then search for a justification after the fact, will be assessed with heightened scrutiny. The stated reason at the time of termination will anchor the court’s analysis, and shifting to new theories during litigation may be foreclosed entirely. Termination letters should be drafted with care, as they may define the boundaries of the acquiror’s litigation position.  
  • Operational control provisions may be enforceable through specific performance. Sellers who negotiate operational control rights during the earnout period generally can expect courts to enforce those rights in equity, including possible reinstatement, particularly where the EPA contains a specific performance clause and the factual findings support an improper interference with operational control provisions. The court’s willingness to order reinstatement of a CEO, even over the acquiror’s objection and amid significant interpersonal conflict, underscores that these provisions can have real teeth.  
  • Courts could equitably extend earnout periods to remedy buyer misconduct. Where an acquiror’s breach shortens the effective earnout window, sellers may obtain an equitable extension to restore the time lost. This decision demonstrates that the court will calculate the extension with specificity, here, matching the 258-day period of the CEO’s ouster, rather than relying on imprecise approximations. Acquirors should be aware that wrongful interference with an earnout does not merely create a damages claim but may extend the earnout obligation itself.  
  • AI-generated strategies are discoverable and create evidentiary risk. The acquiror’s use of an AI chatbot to develop strategies for avoiding the earnout, and the subsequent deletion of those logs-featured prominently in the court’s factual findings. Parties should treat AI-generated content as they would any other business communication: subject to discovery, preservation obligations, and potential adverse inference.  
  • Contractual specific performance clauses carry significant weight in Delaware. The EPA’s mutual agreement that breach would cause irreparable harm and that the parties would be entitled to specific performance materially influenced the court’s remedy. Sellers should insist on these provisions, and acquirors should understand that agreeing to them creates meaningful exposure to equitable relief, including when warranted based upon the court’s factual findings, forced reinstatement and injunctive relief, not merely monetary damages.

U.S. Customs and Border Protection (CBP) has submitted a series of declarations to the U.S. Court of International Trade (CIT) in Atmus Filtration, Inc. v. United States (Court No. 26-01259) — on March 6, March 12, and March 19 — outlining both the legal and operational framework for refunds of duties imposed under the International Emergency Economic Powers Act (IEEPA). These developments follow the U.S. Supreme Court’s February 20, 2026, decision, holding that IEEPA does not authorize the President to impose tariffs.

The submissions provide increased clarity on CBP’s planned implementation of refunds through enhanced functionality in the Automated Commercial Environment (ACE). This new ACE functionality is referred to as the Consolidated Administration and Processing of Entries (CAPE) system. However, critical legal questions remain unresolved, particularly whether importers can recover IEEPA-related duties on entries that have already liquidated and are now final (i.e., entries for which the 180-day protest period has expired with no protest filed). CBP’s approach is evolving in response to ongoing litigation rather than through independent formal agency guidance.

The CIT’s Initial Order

The CIT’s March 4 order (as amended on March 5) directed CBP to: (1) liquidate all unliquidated entries without IEEPA-related duties (i.e., by recalculating the entries as if those duties had never been applied and refunding any amounts paid); and (2) reliquidate any liquidated entries for which liquidation is not final on the same basis. The order emphasized that all importers of record whose entries were subject to IEEPA-related duties are entitled to the benefit of the Supreme Court’s decision.

However, on March 6, following a closed conference and CBP’s declaration on operational constraints, the CIT amended the order to suspend immediate compliance pending development of an administrative refund process. This suspension remains in effect, with the CIT continuing to monitor progress through closed conferences and required reports.

What Liquidation and Reliquidation Mean — and Why They Matter

CBP’s March 6 declaration provides the governing framework: liquidation finalizes the duty owed on an entry, and reliquidation revises a prior determination. Under standard customs laws and regulations, CBP may reliquidate an entry within 90 days of liquidation, importers may protest within 180 days, and thereafter the liquidation becomes final and conclusive. In this context, liquidating unliquidated entries without IEEPA-related duties finalizes them as if those duties were never imposed, enabling refunds with interest. Similarly, reliquidating non-final entries removes IEEPA-related duties retroactively, allowing CBP to recalculate duty liability and issue refunds consistent with the CIT’s directive.

What the Order Does Not Clearly Cover

A key unresolved issue is whether refunds will be available for entries already liquidated and beyond the 180-day protest period (with no protest filed). Neither the CIT’s order nor CBP’s declarations address this definitively: the CIT’s language limits relief to entries “for which liquidation is not final,” CBP has not asserted authority to reopen final liquidations, and no mechanism has been identified to override statutory finality under 19 U.S.C. § 1514. Entries in this category remain in legal uncertainty, and there is no indication that CAPE will initially cover final liquidations; this issue may require further litigation or additional guidance.

CBP’s March 6 Declaration: Operational Constraints and Proposed Approach

CBP described the scale of the task as significant and explained that current systems cannot process IEEPA-related refunds at the required volume without substantial manual effort and potential disruption, given the difficulty of isolating IEEPA-related duties in entry data, performing mass updates, and calculating interest across such a large population of entries. CBP proposed new ACE functionality to: (1) allow importers to submit claims; (2) automatically recalculate duties excluding IEEPA-related tariffs; (3) trigger liquidation or reliquidation; and (4) aggregate refunds and issue payments electronically (with interest). This forms the basis for CAPE.

CBP’s March 12 and March 19 Update: CAPE Development Progress

As of March 19, CBP has declared that around 73% of the CAPE portal is complete, its development of the Review and Liquidation/Reliquidation component is 80% complete, and its development of the CAPE-specific refund processing functionality component within ACE is 63% complete. All components are undergoing testing, with no firm go-live date provided (earlier indications suggested potential operability within approximately 45 days from early March).

Key features include automated removal of IEEPA-related tariff Entry Summary lines, event history tracking for audit trails, validation logic to exclude certain entries (e.g., those with suspended AD/CVD liquidation), and consolidated refunds by importer and liquidation date.

CBP has indicated that CAPE will be implemented in phases and will not initially cover certain categories of entries, including those subject to suspended antidumping or countervailing duty proceedings, entries that are currently under CBP review or otherwise in a final processing status, and certain special entry types (e.g., drawback and warehouse entries).

Based on CBP’s current system design, refunds are expected to be initiated through importer-submitted claims via the CAPE portal (e.g., CSV uploads of entry data), rather than fully automatic processing. However, CBP has not yet issued formal guidance on claim requirements or whether any categories of refunds may be processed without affirmative submissions.

Importers will be required to file a declaration in ACE listing the entries on which IEEPA-related duties were paid. ACE will then run a series of validations on each entry in the declaration, automatically recalculate the duty owed without the IEEPA-related tariffs (with applicable interest), and, once CBP verifies the declaration, ACE will aggregate and certify the resulting refunds, which Treasury will issue electronically via ACH. Because CBP now issues all refunds electronically, any importer that has not completed the required set-up to receive ACH refunds will have those payments rejected until the electronic enrollment process is completed.

What Remains Unresolved

Open issues include: (1) whether CBP can or will reopen final liquidations; (2) any legal basis to override statutory finality; and (3) the exact timing of CAPE deployment and specific claim submission requirements. These may be addressed through further CIT proceedings or formal CBP guidance.

Practical Next Steps for Importers

Importers should:

  • Identify and categorize entries: unliquidated; liquidated within 180 days; liquidated beyond 180 days (with/without protest).  
  • Prepare for CAPE by confirming ACE Portal access, completing enrollment to receive refunds by electronic funds transfer, coordinating with customs brokers, and organizing entry data now (including compiling entry numbers, supporting documentation, and CSV-ready lists), as proactive claims will be required.  
  • Monitor CBP guidance, CIT filings, and developments for deployment details, claim procedures, and any updates on final liquidations.  

Key Takeaway

CBP’s recent declarations outline a developing, CAPE-based mechanism in ACE for processing IEEPA-related duty refunds through liquidation and reliquidation of covered entries. The availability of relief for entries already subject to final liquidation, however, remains unresolved and presents a material legal uncertainty. Importers should anticipate a phased, claims-driven process, focus on operational readiness (data, systems, and broker coordination), and consider parallel legal strategies where significant exposure involves time‑barred entries. We will continue to monitor the litigation and CBP guidance and provide further updates as the framework is refined.

Please enjoy the winter edition of Troutman Pepper Locke’s Alumni Newsletter.

A Message From Firm Leaders

As we wrap up the first quarter of 2026 and move into a busy and energizing season for Troutman Pepper Locke, we are pleased to share updates from the past quarter and highlight exciting initiatives in the months ahead.

Over the past few months, we’ve continued to strengthen our platform by welcoming two lateral partners to the firm: Ryan O’Neil (Health Care + Life Sciences Litigation) and Allison Perlman (Energy Transactional). Their experience and perspectives further enhance our capabilities and support the continued growth of our practices and industries.

Looking ahead, we are preparing to welcome more than 100 summer associates in May for a substantive, mentorship-focused program designed to help them build meaningful connections and develop their skills within the firm. We are also looking forward to our 2026 Week of Service during the week of June 8, when lawyers and business professionals from across the firm come together to support organizations in the communities where we live and work. This is a firm tradition we are proud to continue each year. In addition, we encourage you to join us for upcoming Continuing Legal Education sessions and alumni attorney receptions, which will offer opportunities to reconnect with former colleagues and stay current on developments across key practice areas.

Our alumni community remains an important part of the firm’s fabric, and we are grateful for the many ways you continue to stay connected. We look forward to seeing many of you at future programs and events and continuing to strengthen this network in the months ahead.

Tom, Amie, David, and Ashley

Photo of Tom Cole Tom Cole
Chair		 Photo of Amie Colby Amie Colby
Managing Partner
Photo of David Taylor David Taylor
Vice Chair		 Photo of Ashley Taylor Ashley Taylor
Vice Chair

A Message From the Alumni Relations Team

The 2026 Winter Olympic and Paralympic games were welcome bright spots many of us enjoyed during the often-dreary early months of the year. Across events and nations, we watched elite athletes demonstrate that even at the highest levels of competition, no one succeeds alone. Behind each competitor stood a team of coaches, family, teammates, and friendly rivals to celebrate victories, sharpen focus, elevate performance, and offer support through disappointments and challenges.

That spirit of competitive camaraderie is familiar to our attorney and alumni communities. During your time at the firm, you trained side by side, shared mentors, developed strategies, built support systems, and gained experiences that shaped the professionals you are today. Now, you may hold a role as opposing counsel or business rivals with the same people you consider mentors, peers, and friends. As leaders in your fields, you understand the value that stems from strengthening ties with these “friendly rivals” to elevate both your individual practice and the profession as a whole.

Let Troutman Pepper Locke’s alumni network serve as your home-ice advantage in strengthening your ties and advancing your goals!

Tap Into Our Knowledge, Insights, Tools, and Connections

  • Subscribe to practice group alerts, newsletters, and thought leadership to stay ahead of legal and business developments that matter to you.
  • Reach out to firm colleagues for support on tricky issues, second opinions, or warm introductions. 
  • Stay current with Troutman Pepper Locke’s industry insights and offerings.

Collaborate With the Firm on Client and Business Opportunities

  • Explore co‑counseling and referral opportunities with Troutman Pepper Locke to jointly serve client needs. 
  • Team up with firm colleagues or fellow alumni to co-create joint initiatives, such as client seminars, roundtables, or industry programs.

Partner With the Firm on Career Growth and Transitions

  • Stay in touch when you’re considering a career move to leverage firm resources on market insights, alumni connections, and career opportunities.
  • Build visibility by participating in alumni spotlights, panels, or interviews and let us know if we can amplify any legal hiring opportunities at your organization across the alumni network.

Leverage Firm CLEs and Programs as a Learning Resource

  • Join alumni-inclusive CLE webinars and other programs to stay current on developments in your practice area and industry.
  • Volunteer to speak or co‑present on CLE panels with firm lawyers or other alumni to share your experience and strengthen professional connections.

Stay Connected and Strengthen the Alumni Experience

  • Attend alumni receptions and regional gatherings to reconnect with former colleagues and meet new alumni in your market or practice area.
  • Pair events with one‑on‑one touchpoints like coffee or virtual catch‑ups to deepen relationships beyond the reception.
  • Update your LinkedIn profile and join the Troutman Pepper Locke Alumni group on LinkedIn.
  • Share suggestions for topics, programs, and events you’d find useful and provide feedback on existing offerings so we can continue to offer meaningful alumni experiences. 

The 2026 Olympic games reminded us that high performance is a result of both individual effort and staying present in the communities you’ve helped build. We are proud to cheer for our alumni community and eager to support your efforts to champion one another.

We’ll be in touch!

Clare, Erin, and Kayla

Clare Roath
Director of Alumni Relations		Erin Warner
Alumni Relations Manager
Kayla Kennedy
Alumni Relations Manager		  

Alumni Spotlight

We caught up with alumni Justin Brandt and Miki Goodin to see what they most enjoy about their current roles and how the time they spent at the firm continues to serve them well.

Justin Brandt
Assistant General Counsel, Westlake Financial Services

Read Justin’s Q&A.

    

Miki Goodin
Associate General Counsel, Baxter Healthcare Corporation

Read Miki’s Q&A.

    

A Message From the Career Coaching + Planning Team

Troutman Pepper Locke’s Career Coaching + Planning Program offers confidential career coaching to firm attorneys at all levels seeking strategic support for their professional development. Our services include individual coaching, cohort coaching, and career transition support. Additionally, we provide engaging workshops, presentations, and panels aimed at enhancing the professional skills of our attorneys. Our team collaborates with administrative departments and practice groups to design and deliver customized curricula on a variety of topics including goal setting, career planning, networking, communication, feedback, and time management.

We look forward to bringing programming to our alumni community in the future to support your career growth! 

2026 Alumni Receptions

Mark your calendars for our in-person receptions! Click here to update your contact information and keep an eye out for invitations as event dates approach! 

If you are a firm or alumni attorney affiliated with another office, but in town for one of our event dates, we’d love to see you!  Email alumni@troutman.com and we’ll gladly add you to that guest list.

Quick Poll

What’s your top networking goal for 2026? Take a quick poll here.

CLE Opportunities

Be sure to check Troutman Pepper Locke’s Learn + Connect Center for frequent updates on additional offerings and share with your fellow alumni and friends of the firm!

Free Fridays: Practicing Law Institute CLE Offerings

As part of the firm’s membership, we are happy to offer CLE offerings from PLI to friends of the firm. If you would like to be included in our Free Friday PLI email distribution, please contact Clare Roath.

On-Demand CLE From Troutman Pepper Locke

Troutman Pepper Locke is pleased to share with our alumni an innovative on-demand CLE portal for complimentary access to recorded content and free registration to live webinars presented by Troutman Pepper Locke attorneys.

Visit TroutmanCLE.com and simply add programs of interest to your cart and check out as you would an online store. Communications about the program, including PINs for access and CLE certificates, will be sent to the email address you provide during checkout.

Please note that you may need to work with your IT professionals if this site is initially flagged by your cybersecurity software.

Click here for detailed instructions on how to access TroutmanCLE.com and contact our CLE management team with any questions.

Firm News

Troutman Pepper Locke Achieves Strong Rankings in Chambers FinTech Guide 2026 and Secures Expanded Chambers Global 2026 Rankings

Thomson Reuters Recognizes 52 Troutman Pepper Locke Attorneys as Stand-out Lawyers

Troutman Pepper Locke Ranks in Top 10 on 2025 Leopard Law Firm Index Top 200

Troutman Pepper Locke Secures Rare U.S. Supreme Court Stay in High-Stakes Congressional Redistricting Case

Troutman Pepper Locke, Dominion Energy Landmark Victories Affirm Access to Educational Benefits for 2.2 Million Veterans and Counting

Troutman Pepper Locke Wins Innovations in Knowledge Management at Legalweek Leaders in Tech Law Awards; Troutman eMerge Named Finalist in Two Categories

Alumni on the Move

Click here to see what some of our alumni are doing now.

Be sure to share with us any recent moves, new roles, promotions, or accomplishments you or your alumni colleagues have achieved.

Let’s Stay Connected

Join the alumni LinkedIn page

Register to receive invitations and communications

Email the alumni team

Glenn Trudel, a partner in Troutman Pepper Locke’s Corporate Practice Group, was published in the Winter 2026 Delaware Banker for his article, “Credit Card Revenues in the Crosshairs.”