The recent announcements and imposition of tariffs on billions of dollars of goods imported by the United States, as well as reciprocal tariffs announced by countries and other governing bodies across the world, have created an uncertain future for many industries. The energy sector is not immune, as the Trump administration seeks to bring critical infrastructure manufacturing back home. At the same time, the Trump administration’s America-first policy initiatives present a unique opportunity for energy manufacturers to reposition themselves in both global and domestic markets. The solar energy industry is at a unique crossroads. Domestic solar production saw record-breaking growth in 2024, building on years of an expanding footprint. And although the American solar energy industry continues to rely on a globalized supply chain for components critical to the domestic manufacturing of solar panels, US manufacturers have made significant progress toward satisfying domestic solar demands.
Read the full article via Infrastructure Magazine.
The insurance industry’s use of artificial intelligence faces increased scrutiny from insurance regulators. Red teaming can be leveraged to address some of the risks associated with an insurer’s use of AI. The U.S. Department of Commerce’s National Institute of Standards and Technology defines a “red team” as:
“A group of people authorized and organized to emulate a potential adversary’s attack or exploitation capabilities against an enterprise’s security posture. The red team’s objective is to improve enterprise cybersecurity by demonstrating the impacts of successful attacks and by demonstrating what works for the defenders (i.e., the blue team) in an operational environment. Also known as cyber red team.”
Red teaming is a concept in cybersecurity. The insurance industry’s enterprise risk, legal and compliance areas are becoming more familiar with the use of red teaming in connection with AI corporate governance efforts.
Read the full article on InsuranceNewsNet.
Does owning a piece of property give you the absolute right to alter or remove any art that’s on it? That question was asked in the recent, high-profile dispute in Manhattan over the Elizabeth Street Garden, a public space beloved by residents that was transformed from a once-abandoned city lot into a sculpture-filled garden three decades ago. The city planned to demolish the garden to build affordable housing for seniors. In response, the garden’s advocates filed a federal lawsuit in February 2025, arguing the entire garden was a “physical and social sculpture” protected from destruction by the Visual Artists Rights Act (VARA).
The dispute was ultimately resolved in June 2025 and the garden was spared. The case still highlights the legal power of VARA and the risks for property owners, a lesson a New York real estate developer learned the hard way when he was ordered to pay $6.75 million for whitewashing graffiti on his own property in the landmark 5Pointz case.
Click here to read the full article on IP Watchdog.
This article was originally published on September 3, 2025 on Law360 and is republished here with permission.
In a high-profile dispute that strikes at the intersection of sports, intellectual property and Chicago neighborhood tradition, on Aug. 13, the Chicago Cubs Baseball Club LLC filed suit in the U.S. District Court for the Northern District of Illinois against Aidan Dunican and Rooftop by the Firehouse Inc., doing business as Wrigley View Rooftop.[1]
The case, Cubs v. Dunican, centers on the practice of rooftop businesses adjacent to famed Wrigley Field selling tickets to view Cubs baseball games from their vantage points — a practice that, for decades, operated under a licensing agreement with the Cubs.
As negotiations appear to have recently broken down, and the parties anxiously await the court’s order on the defendants’ motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure filed in June that could issue any day, it is a good time to open a beer, review the replays and make some predictions about who could win out in this diamond donnybrook.
First, to set the scene for any nonsports fans or readers who visit the Art Institute of Chicago instead of taking in Cubs baseball games in the bleachers, the Chicago Cubs play their home games at Wrigley Field, which is one of the oldest stadiums in sports.
Located in a neighborhood on the north side of Chicago, the field is relatively low-lying, particularly in the outfield, where it is surrounded by buildings that have an unobstructed view into the stadium to watch games.
According to the Cubs’ complaint, for 20 years, Dunican and Wrigley View Rooftop, and other neighboring rooftop owners, paid for licenses that allowed them to sell tickets to view Cubs games and use the Cubs’ intellectual property.
That license expired at the end of 2023 when negotiations for a new agreement broke down. Despite the expiration, the Cubs allege that the defendants continued to sell tickets for the 2024 season, advertise themselves as an “Official Cubs Partner,” and use Cubs trademarks and branding in their marketing.
The Cubs assert that the defendants’ conduct constitutes misappropriation, unjust enrichment, federal trademark infringement, unfair competition, false advertising and violations of Illinois state law. The team stops short of accusing the defendants of rooting for the Mets.
For relief, the Cubs seek damages, disgorgement of profits, and a permanent injunction barring the defendants from selling rooftop admissions to Cubs games or using Cubs intellectual property without a license.
The defendants, for their part, deny the allegations and raise a host of affirmative defenses, including fair use, nominative use, implied license, acquiescence and unclean hands. They argue that their continued operations were in good faith during ongoing negotiations, that any use of Cubs marks was either permitted or promptly ceased, and that the Cubs have suffered no actual harm.
In the context of attending events such as baseball games at Wrigley Field, a ticket is legally considered a license. A license is a revocable, nonpossessory right to enter or use another’s property for a specific purpose.
When a person purchases a ticket to a Cubs game, they are not acquiring any ownership interest in Wrigley Field or the Cubs’ property; rather, they are being granted permission — via a license — to enter the ballpark and watch the game under the terms and conditions set by the property owner.
The Cubs allege that for 20 years, Dunican and Wrigley View Rooftop paid the Cubs for a license to sell tickets to Cubs games and to use the Cubs’ intellectual property. When that license expired, the right to sell tickets and use the Cubs’ marks also expired.
The Cubs’ position is that continuing to sell tickets to view Cubs games from the rooftop without a license constitutes misappropriation and unjust enrichment. The defendants counter that they are merely selling access to the roof of a building, and that further, no license is required to watch an event that is publicly visible without needing to enter Cubs property.
Misappropriation is defined as the “application of another’s property or money dishonestly to one’s own use.”[2] The Cubs’ theory of misappropriation is not based on trespass to land, but on the unauthorized commercial exploitation of the Cubs’ intangible property rights, most particularly in copyright.
But to what extent can what is in plain view be misappropriated? Indeed, the offices of the writers of this article have an unobstructed view of the inside of Georgia Tech’s Bobby Dodd Stadium.
While, to our colleagues who are Georgia Tech alumni, we would respond that we would never actually watch a Georgia Tech football game, the question arises whether, under the legal logic of the Cubs, we need an intellectual property license to remain in our offices on a Saturday afternoon in the fall.
Title 17 of the U.S. Code, Section 106, outlines the exclusive rights of copyright holders.[3] Specifically, it grants the copyright owner the exclusive right to perform the copyrighted work publicly, which includes broadcasting.
In National Basketball Association v. Motorola Inc., the U.S. Court of Appeals for the Second Circuit held in 1997 that once a performance is fixed in a tangible medium, such as a broadcast, both the broadcast and the underlying event fall within the subject matter of copyright for preemption purposes.[4]
The court emphasized that Congress intended for uncopyrightable elements within copyrightable works to remain in the public domain, and allowing state law protection for such elements would undermine that intent.[5]
A brief review of the facts of the NBA case can provide insight into how the Northern District of Illinois might rule in the present case.[6] The development of the defendants’ pager and website provided real-time factual information about NBA games, such as scores and statistics, but did not reproduce any expressive content from NBA broadcasts.[7]
The information provided by the defendants and the AOL site was collected independently by reporters, who watched games on TV or listened on the radio, rather than copying from the NBA’s own data services.[8]
The Second Circuit in the NBA case found that the underlying basketball games do not fall within the subject matter of federal copyright protection because they do not constitute “original works of authorship” under Title 17 of the U.S. Code, Section 102(a).[9]
Sports events are not “authored” in any common sense of the word. Case law from the U.S. Court of Appeals for the Seventh Circuit, although scarce on the issue, was used to support these findings. In Production Contractors Inc. v. WGN Continental Broadcasting Co. in 1985, the Northern District of Illinois held that a Christmas parade was not a work of authorship entitled to copyright protection.[10]
Further, the NBA relied in part on a footnote in Baltimore Orioles Inc. v. Major League Baseball Players Association, decided by the Seventh Circuit in 1987, stating that the “[p]layers’ performances” contain the “modest creativity required for copyright ability.”[11]
However, the court went on to state, “Moreover, even if the [p]layers’ performances were not sufficiently creative, the [p]layers agree that the cameramen and director contribute creative labor to the telecasts.”[12] Here, there is an indication that the Seventh Circuit was considering the telecasts — not the underlying games.
In cases concerning hot-news misappropriation, the court recognized a narrow form of this claim survives preemption, specifically where the plaintiff gathers information at a cost, the information is time-sensitive, the defendant’s use constitutes free-riding, the defendant is in direct competition, and the free riding would threaten the existence or quality of the product or service.
Applying this test, however, the court held that Motorola and Sports Team Analysis and Tracking Systems LLC did not engage in unlawful misappropriation in creating their sports statistics pager, SportsTrax.
Although the information transmitted by the pagers was time-sensitive and the NBA planned to offer a competing pager product, Motorola expended its own resources to collect and transmit factual information, rather than riding on the NBA’s efforts.
The court distinguished this situation from International News Service v. Associated Press, decided by the U.S. Supreme Court in 1918, noting that SportsTrax did not substitute for attending games or watching broadcasts, nor did it undermine the NBA’s primary business or its future pager product, as both parties bore their own costs of data collection.[13]
For the Cubs and Dunican, provided that there is no copyrighted property protection for the Cubs games, the hot-news misappropriation test adopted by NBA v. Motorola will also likely fail, in that it is unlikely for a court to find that any free riding committed by Dunican would threaten the existence or quality of the product or service offered by the Cubs.
However, the unauthorized use of the Cubs trademark and intellectual property is a viable issue that could enjoin their use in the promotion and provision of the rooftop tickets.
This case not only tests the boundaries of intellectual property rights in the context of live sporting events, but also highlights the evolving relationship between the Cubs and the iconic rooftop businesses that have become part of the Wrigley Field experience.
The outcome will likely have significant implications for both the protection of the business of live sports, and also the character of the Wrigleyville neighborhood.
Live sporting event owners and promoters, such as the Boston Marathon or the F1 race in Las Vegas, will need to consider if there are ways to stop unlicensed third parties from selling viewing rights to their events.
As we await the district court’s order regarding the defendants’ motion for judgment on the pleadings pursuant to Rule 12(c), Chicago residents may wonder if they should anticipate a shift in the relationship between the Cubs and the rooftops surrounding Wrigley Field, such as erecting an outfield wall in the spirit of Fenway Park’s Green Monster to block the rooftop views, which could render the intellectual property and other dispute issues moot.
[1] Chicago Cubs Baseball Club, LLC v. Dunican, No. 24-cv-05086, 2025 WL 1101654 (N.D. Ill. Apr. 14, 2025).
[2] Black’s Law Dictionary (12th ed. 2024) (defining “misappropriation”).
[3] 17 U.S.C. § 106.
[4] Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 849 (2d Cir. 1997).
[5] Id.
[6] Id. at 843‒44.
[7] Id.
[8] Id.
[9] Id. at 846.
[10] Production Contractors, Inc. v. WGN Continental Broadcasting Co., 622 F.Supp. 1500 (N.D.Ill.1985).
[11] Baltimore Orioles, Inc. v. Major League Baseball Players Assn., 805 F.2d 663, 669 n. 7 (7th Cir.1986).
[12] Id.
[13] NBA v. Motorola, 105 F.3d at 850‒51.
On August 29, 2025, during a speech at Ohio State University Law School, Assistant Attorney General Gail Slater announced the creation of a “Comply With Care” task force within the Antitrust Division of the Department of Justice (DOJ), which will focus on enforcement actions against parties flouting disclosure obligations. The speech and task force are a continuation of the Antitrust Division’s recent lawsuits against companies for failing to make merger filings under the Hart-Scott-Rodino (HSR) Act or responding properly to investigations.
AAG Slater stated the DOJ’s commitment to counter those who “undermine sound antitrust enforcement for everyone,” specifically claiming that “a few actors—many of them at Big Law firms” have used “[t]actics designed to circumvent legal process and hinder our investigations.”
The speech highlighted alleged violations of the HSR Act, which are subject to a fine of up to $53,088 per day. The targeted practices include failing to make HSR filings and failing to submit relevant documents.
AAG Slater criticized other practices in investigations and pointed to court rulings finding that corporate defendants failed to preserve evidence and live up to discovery obligations. Specific objectionable practices include delay tactics, overuse of the attorney-client privilege, deficient privilege logs, and failure to preserve documents, including ephemeral messages. Her remarks took aim at practices aimed at hiding material information from investigators or courts, such as “systematic behavior that led to the destruction of relevant evidence,” particularly regarding the use of messaging apps due to the automatic deletion of messages within 24 hours and the failure of hold notices to prevent such deletions.
AAG Slater highlighted that privilege logs must not be abused and noted, for example, that simply listing “Legal Department” as the basis of privilege is not sufficient. Accordingly, “[p]rivilege abuses are grounds for enforcement actions and sanctions motions.” Examples included an enforcement action filed against a company for claiming a “blanket privilege” over an entire category of documents, and a company that instructed employees to add attorneys to communications and to “ask the lawyer a question” whenever they dealt with a sensitive issue, and to “avoid using certain ‘antitrust buzzwords’ in their communications.”
To combat these abuses, the Antitrust Division has established a “Comply With Care” task force targeting “problematic tactics from outside lawyers and law firms” that could distort the process and obfuscate the potential anticompetitive effects of transactions or conduct. The responsible Antitrust Division officials will focus on “abuses” by respondents in investigations “and take decisive action to address them.” The task force will likely issue guidance and continue to bring investigations and enforcement actions against companies viewed as not complying with their legal obligation to make filings or respond to process.
The importance of parties’ and counsels’ credibility before the agencies and the courts cannot be overstated. Although the substantial burden of any agency investigation, including the detailed privilege logs called for by Second Requests and other agency civil investigative demands, and the preservation obligations arising from the ever-evolving technologies and methods of communication, do not make compliance simple or easy, consultation with counsel well in advance of making required HSR filings and at the earliest stage of any internal or external investigation can assist with counterbalancing some of those burdens and mitigating the cost of litigating compliance or imposition of sanctions.
Summary
On August 29, 2025, the U.S. Department of Justice (DOJ) announced the formation of a cross-agency Trade Fraud Task Force in partnership with the Department of Homeland Security (DHS). This initiative is designed to strengthen enforcement against importers and other parties who seek to defraud the U.S. by evading tariffs, duties, and other trade regulations. The Trade Fraud Task Force is focused on ensuring compliance with trade laws, including all applicable tariffs and duties, such as antidumping and countervailing duties, as well as Section 301 tariffs on Chinese-origin goods. The task force will leverage resources and expertise from both DOJ’s Civil and Criminal Divisions, and DHS agencies, including U.S. Customs and Border Protection (CBP), and Homeland Security Investigations (HSI).
The task force will pursue aggressive enforcement action, including civil and criminal penalties against parties engaged in trade fraud. The task force stated it welcomes referrals and cooperation from both the domestic industries as well as whistleblowers. The task force also encouraged all importers to conduct thorough audits and voluntarily self-disclose and remediate any unlawful behavior.
Implications for Clients
The creation of this task force signals the administration’s willingness to pursue criminal enforcement in an area that has historically been policed through civil or administrative enforcement, as discussed in our prior client alert. Importers, exporters, and logistics providers should expect heightened scrutiny of their trade practices, documentation, and compliance programs. In addition to heightened scrutiny from government agencies, companies operating in international supply chains should also anticipate a rise in qui tam False Claims Act cases initiated by whistleblower plaintiffs, further underscoring the need for rigorous compliance and monitoring. Companies should review internal controls, ensure accurate classification and valuation of goods, and maintain robust compliance procedures to mitigate risk. Violations may result in significant civil and criminal penalties, reputational harm, and disruption of business operations.
Recommended Actions
With the Trump administration’s implementation of new tariffs and the DOJ’s focus on pursuing customs enforcement through civil and criminal means, it is imperative that companies importing goods, particularly from China and other countries facing increased scrutiny, maintain effective compliance programs. Key items include:
- Training staff on updated enforcement priorities and relevant regulations;
- Ensuring internal systems are tracking updates to tariff rates;
- Reviewing country-of-origin certifications, especially for goods sourced from high-risk jurisdictions;
- Maintaining detailed records and examining supplier contracts;
- Conducting internal audits and investigations where potential inflection points exist, and preparing for voluntary disclosure and remediation.
This alert is intended as a guide only and is not a substitute for specific legal or tax advice. Please reach out to the authors with any specific questions. We expect to continue to monitor the topics addressed in this alert and provide future client updates when useful.
Published in Law360 on September 2, 2025. © Copyright 2025, Portfolio Media, Inc., publisher of Law360. Reprinted here with permission.
After decades of operating under its old regulatory framework, the Federal Communications Commission has modernized its oversight of submarine cable infrastructure, a critical component of the world’s telecommunications network responsible for 99% of global internet traffic.
On Aug. 7, the FCC approved a comprehensive update — a review of submarine cable landing license rules and procedures report and order — and further notice of proposed rulemaking.[1]
The order clarifies the requirements for obtaining a submarine cable landing license, streamlines the agency’s application review process and implements measures to safeguard against threats from foreign adversaries.
The notice of proposed rulemaking invites comment on a host of additional FCC recommendations, including the integration of artificial intelligence within the submarine cable network to improve maintenance and detect and address physical and cybersecurity threats.
How It Works
Submarine cables are an important component of the global internet backbone. Contrary to popular belief, the world is not purely connected via satellites. Instead, it is these long strands of fiber that connect most of the modern communications network.
Their complexity is evidenced by the sheer planning involved — submarine cables are laid in a harsh marine environment, across seabeds, with the use of special ships and heavy machinery to lay the cable. But that complexity is often eclipsed by permitting and other regulatory challenges when traversing multiple jurisdictional boundaries.
Undersea cable technology continues to improve. Newer systems provide increased bandwidth capacity and improved durability with higher fiber counts, as well as advanced amplification technologies. This all translates into faster, more efficient data transmission.[2]
With a significant amount of the world’s communications flowing through these cables, they are potentially vulnerable to physical and cyber intrusion or destruction. Distantly placed cables offer the potential for espionage and sabotage, and recent reports of physical attacks have been reported on cables in the Baltic Sea, Red Sea and in areas near Taiwan.[3]
Additionally, these systems often suffer accidental damage from commercial fishing, shipping and underwater earthquakes.[4]
Legal Background
The Cable Landing Licensing Act, enacted in 1921, provides the structure for the U.S. government’s oversight of undersea cables.[5] The CLLA requires entities to obtain a license from the president for landing or operating a submarine cable “directly or indirectly connecting the U.S. with any foreign country, or connecting one portion of the U.S. to any other portion thereof.”[6]
In 1954, Executive Order No. 10530, providing for the performance of certain functions vested in or subject to the approval of the president, the president delegated to the FCC the responsibility to oversee the granting, withholding or revoking of submarine cables with the assistance and approval of the U.S. Department of State.[7] There are now approximately 90 FCC-licensed submarine cable systems.[8]
In 1997, the FCC issued the Foreign Participation Order, with an aim to promote the “national security, law enforcement, foreign policy, and trade policy concerns in the FCC’s public interest review process.”[9] The FCC’s last significant cable landing license proceeding was in 2001, designated as the Cable Report and Order, which focused on competition in this space rather than national security.[10]
Since 2001, the FCC has reviewed license requests under Title 47 of the Code of Federal Regulations, Section 1.767, which outlines, among many other things, information required in an application and the FCC’s procedures for processing applications.[11]
Recognizing the changes in technology over the past two decades, and the need for better coordination among various federal agencies, the FCC recognized that it was time to modernize submarine cable rules. Many of the issues addressed in the order attest to a rapidly expanding communications landscape in which not just carriers, but hyperscalers, now own or lease a substantial portion of the capacity of these subsea cables.
Clarifying the CLLA
For over 100 years, the FCC has been operating under the CLLA without further clarification. The FCC’s new order seeks to clarify the requirements of the CLLA and define more precisely which submarine cables are subject to regulation.
The new order states that a cable landing license is required for any submarine cable that connects:
the continental U.S. with any foreign country; Alaska, Hawaii, or the U.S. territories or possessions with a foreign country, the continental U.S., or with each other; or points within the continental U.S., Alaska, Hawaii, or a territory or possession in which the cable is laid in areas beyond U.S. territorial waters, which extends 12 nautical miles seaward from the coastline.[12]
The FCC requires a license, even at domestic points, if the cables traverse areas beyond U.S. territorial waters, including those connecting U.S. states, territories or possessions. The new rules also clarify that cables wholly within the continental U.S. and within territorial waters are exempt. For example, a license would not be required for a cable running between two points in California if the points are laid within U.S. territorial waters.
Alaska and U.S. territories like Guam continue to be a national security priority because of the foreign policy concerns in the Arctic region and the territories’ proximity to military bases. In light of the specific inclusion of U.S. territories in the CLLA, it is no surprise that the CLLA is interpreted to cover subsea cable systems connecting to these areas.
The FCC also makes clear that a submarine cable includes the system that “extends to and includes the Submarine Line Terminal Equipment (SLTE) … whether located in a cable landing station or further in-land with data centers.”[13] This is crucial, as some have debated whether the FCC and Team Telecom can regulate only the submarine cable itself, or also the equipment and/or devices adjacent to the submarine cable, including within data centers.
Applicants and Application Requirements
Submarine cables require significant investment, which is why they often have various owners, investors and lenders, often in what are termed “subsea cable consortiums.” With so many entities involved, it was not always clear who was required to be an applicant and/or who was included as part of Team Telecom’s review.
The new order clarifies that entities that own or control at least a 5% interest in a submarine cable system and use the U.S. end points must be applicants for a submarine cable license. Entities that control a cable landing station must also be license applicants. The FCC has shifted its position by excluding entities from licensing requirements that only own, but do not control, a cable landing station.
At this time, the FCC will not require owners or operators of SLTEs to be licensees, even though an SLTE is part of the submarine cable definition. However, the notice of proposed rulemaking seeks to collect input and information on this topic for purposes of possible future regulation.
The FCC’s new rules also provide modified requirements when entities submit a request for modification, assignment, transfer of control or renewal of a cable license. For purposes of new applications, the FCC is taking a more proactive role in the front end of the process by requiring more information about the submarine cable, including cybersecurity and equipment information.
Historically, the FCC utilized standard questions tailored to submarine cable requests, and applicants could request streamlined processing, which requires the FCC to act on the application within 45 days after the release of a public notice announcing the application.[14] Streamlined processing is available if the applicants do not have 10% or more foreign ownership and meet other conditions outlined in Title 47 of the Code of Federal Regulations, Section 1.767(i) and (j).[15]
Under the new order, applicants will need to provide detailed information about the cable system, including continued reporting of the licensees’ ownership at or above 10%, landing points, and third-party service providers, and must certify compliance with cybersecurity and physical security risk management plans that best tailor their organizational risk needs.
Licensees that follow the National Institute of Standards and Technology’s Cybersecurity Framework — or one of the other enumerated frameworks — will presumptively be found to meet this requirement.
Foreign Adversary Concerns
In recent years, the FCC has intensified its focus on national security issues. Earlier this year, the FCC established a Council on National Security[16] and proposed new rules focused on foreign adversary data collection and licensee reporting on involvement of foreign adversaries.[17] It also strengthened prohibitions on equipment testing by entities associated with foreign adversaries.[18]
This new order continues the FCC’s focus on foreign adversaries — this time in the submarine cable environment.
The order adopts a strong presumption against granting landing licenses to individuals or entities that are “owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.”[19] “Foreign adversaries” is defined to consist of China, Cuba, Iran, North Korea, Russia and the Maduro regime in Venezuela.[20]
This presumption also extends to entities listed on the FCC’s covered list[21] for equipment and services pursuant to the Secure Networks Act,[22] and to entities whose previous authorizations have been denied or revoked on national security and law enforcement grounds, including current and future affiliates and subsidiaries.
The order also prohibits the landing of submarine cables in foreign adversary countries. These presumptions can only be overcome by clear and convincing evidence that granting the license would not pose national security risks or that the benefits would substantially outweigh any risks.
Existing licensees that meet any of the presumptions of denial criteria, or land in foreign adversary countries, will need to complete a foreign adversary annual report, which will be required 60 days after the new rules become effective.
An additional area of concern for the FCC is the way that access to the capacity of cables is sold, leased, purchased or owned. Recently, cable licensees have been issuing leases or other capacity access rights through indefeasible rights of use. Grantees are often not applicants or licensees, and are therefore not subject to any regulatory oversight.
Going forward, the FCC will prohibit cable licensees from entering into indefeasible rights of use with entities that are “owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.”
Information Collection
The FCC will also require a one-time information collection for all cable licensees. Licensees will be required to provide updated information on the submarine cables to assess for insolvency, provide information on SLTE owners and operators, and certify whether equipment or services on the covered list are used on the cable.
New applicants will need to certify in their initial applications whether they will use third-party foreign adversary service providers in the operation of their cables.[23]
As part of the notice of proposed rulemaking, the FCC is also seeking information on whether to exempt initial applications, along with modifications, assignments, and transfer of control or renewal requests from Team Telecom review if the applicants meet all qualifications that “ensure the security, integrity, and resilience of the submarine cable system.”[24]
These qualifications could include the utilization of enhanced cybersecurity and physical security standards, and a certification that no entity holding any interest in the submarine cable system is “owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.”
Moving Forward
The FCC’s efforts at regulatory reform have come at an inflection point in the cable industry. Subsea cable infrastructure is expected to require billions of dollars in new capital investment in the coming years.[25] This investment is needed to provide increased capacity and improve the resilience of this critical global data transmission system.
In light of this sector’s expected capital requirements, there will continue to be a need for foreign investment. For submarine cable systems under the FCC’s jurisdiction, however, the order makes clear that ownership by persons or entities associated with foreign adversaries will rarely, if ever, be allowed.
Submarine cables present a complex array of legal and policy challenges. As highlighted by the new FCC order and ongoing Team Telecom work, submarine cables carry heightened national security vulnerabilities.
Entities involved — whether directly or indirectly — in submarine cable systems, their capacity, associated equipment and connected devices should familiarize themselves with the FCC’s initiatives in these areas, especially those aimed at addressing national security and law enforcement concerns. Navigating these regulations can be demanding, as they are influenced by the evolving foreign policy landscape and rapid technological advancements.
[1] Review of Submarine Cable Landing License Rules and Procedures to Assess Evolving National Security, Law Enforcement, Foreign Policy, and Trade Policy Risks (Aug. 13, 2025), https://www.fcc.gov/document/fcc-acts-accelerate-submarine-cable-buildout-security-0.
[2] NexGen Networks, Submarine Cable System Market Set to Reach $30.50 Billion by 2030, Driven by Growing Data Demand (Sept. 24, 2024), https://www.nexgen-net.com/post/submarine-cable-system-market-set-to-reach-30-50-billion-by-2030-driven-by-growing-data-demand.
[3] Dan Milmo, Risk of undersea cable attacks backed by Russia and China likely to rise, report warns, The Guardian (July 17, 2025), https://www.theguardian.com/technology/2025/jul/17/risk-undersea-cable-attacks-backed-russia-china-likely-rise-report-warns.
[4] See generally Colin Wall and Piere Marcus, Invisible and Vital: Undersea Cables and Transatlantic Security (2021), https://www.csis.org/analysis/invisible-and-vital-undersea-cables-and-transatlantic-security; see also Nathan Eddy, Subsea Cable Market Expands as AI, Geopolitics Reshape Global Wetworks (Apr. 15, 2025), www.datacenterknowledge.com/ables/subsea-cable-market-expands-as-ai-cloud-geographics-reslope-global-networks.
[5] Cable Landing Licensing Act, Pub. L. 8, 42 Stat. 8 (1921), https://www.govinfo.gov/content/pkg/COMPS-3115/pdf/COMPS-3115.pdf.
[6] Id. at § 1.
[7] Exec. Order No. 10530, 19 C.F.R. 2711 (1954).
[8] Submarine Cable Landing Licenses, Federal Communications Commission, https://www.fcc.gov/research-reports/guides/submarine-cable-landing-licenses.
[9] Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership, 89 FR 68117 (Aug. 23, 2024), https://www.federalregister.gov/documents/2024/08/23/2024-18604/process-reform-for-executive-branch-review-of-certain-fcc-applications-and-petitions-involving.
[10] Review of Commission Consideration of Applications Under the Cable Landing License Act, 67 FR 1615 (Jan. 14, 2002), https://www.federalregister.gov/documents/2002/01/14/02-789/review-of-commission-consideration-of-applications-under-the-cable-landing-license-act.
[11] 47 C.F.R. § 1.767, et seq.
[12] Review of Submarine Cable Landing License Rules and Procedures to Assess Evolving National Security, Law Enforcement, Foreign Policy, and Trade Policy Risks ¶ 65 (Aug. 13, 2025), https://www.fcc.gov/document/fcc-acts-accelerate-submarine-cable-buildout-security-0.
[13] Id. at ¶ 71-75.
[14] Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership, 89 FR 68117 (Aug. 23, 2024) https://docs.fcc.gov/public/attachments/FCC-21-104A1.pdf.
[15] 47 C.F.R. § 1.767 (i), (j).
[16] Federal Communications Commission, Chairman Carr Establishes New Council on National Security Within Agency (Mar. 13, 2025), https://docs.fcc.gov/public/attachments/DOC-410155A1.pdf.
[17] Protecting our Communications Networks by Promoting Transparency Regarding Foreign Adversary Control, 90 FR 26244 (June 20, 2025), https://www.federalregister.gov/documents/2025/06/20/2025-11360/protecting-our-communications-networks-by-promoting-transparency-regarding-foreign-adversary-control.
[18] In the Matter of Promoting the Integrity and Security of Telecommunications Certification Bodies, Measurement Facilities, and the Equipment Authorization Program, 90 FR 31945 (July 16, 2025), https://www.federalregister.gov/documents/2025/07/16/2025-13308/promoting-the-integrity-and-security-of-telecommunications-certification-bodies-measurement.
[19] Review of Submarine Cable Landing License Rules and Procedures to Assess Evolving National Security, Law Enforcement, Foreign Policy, and Trade Policy Risks ¶ 42 (Aug. 13, 2025), https://www.fcc.gov/document/fcc-acts-accelerate-submarine-cable-buildout-security-0.
[20] 15 CFR § 791.4(a).
[21] Federal Communications Commission, List of Equipment and Services Covered By Section 2 of The Secure Networks Act, https://www.fcc.gov/supplychain/coveredlist.
[22] Secure Networks Act, 116 Pub. L. 124, 134 Stat. 158 (Mar. 12, 2020), https://www.govinfo.gov/content/pkg/PLAW-116publ124/pdf/PLAW-116publ124.pdf.
[23] These submissions may provide information confirming that firms based in China have a very strong position in the repair ship sector. Observers have cautioned that over-reliance on these repair ships creates vulnerability. See Daniel Runde, Erin Murphy and Thomas Bryja Safeguarding Subsea Cables: Protecting Cyber Infrastructure amid Great Power Competition (August 16, 2024), https://www.csis.org/analysis/safeguarding-subsea-cables-protecting-cyber-infrastructure-amid-great-power-competition.
[24] Review of Submarine Cable Landing License Rules and Procedures to Assess Evolving National Security, Law Enforcement, Foreign Policy, and Trade Policy Risks ¶ 274 (Aug. 13, 2025), https://www.fcc.gov/document/fcc-acts-accelerate-submarine-cable-buildout-security-0.
[25] A 2024 Analysis Mason report indicates that spending on new subsea systems and operation of existing systems is expected to grow from $7.96 billion in 2023 to $9.80 billion in 2029. This growth is driven by the desire of governments to build more route diversity. Growth is also driven in part by the needs of hyperscalers such as Amazon, Meta, and Google to continue building new transcontinental routes needed for data centers and AI workloads. See NexGen Networks, Submarine Cable System Market Set to Reach $30.50 Billion by 2030, Driven by Growing Data Demand (Sept. 24, 2024), https://www.nexgen-net.com/post/submarine-cable-system-market-set-to-reach-30-50-billion-by-2030-driven-by-growing-data-demand.
Regulatory Oversight Blog
Make sure to visit Troutman Pepper Locke’s Regulatory Oversight blog to receive the most up-to-date information on regulatory actions and subscribe to our mailing list to receive a monthly digest.
Regulatory Oversight will provide in-depth analysis into regulatory actions by various state and federal authorities, including state attorneys general and other state administrative agencies, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). Contributors to the blog will include attorneys with multiple specialties, including regulatory enforcement, litigation, and compliance.
Troutman Pepper Locke Spotlight
Troutman Pepper Locke’s Spencer Churchill Joins DOJ’s Office of Legal Counsel
Spencer Churchill, an associate based in Troutman Pepper Locke’s Washington, D.C. office, has been appointed to serve as a deputy assistant attorney general in the Department of Justice’s (DOJ) Office of Legal Counsel (OLC). In his new position, he will advise on some of the most important and complex legal questions surrounding executive power and agency action. The OLC counsels the president and executive branch agencies on the parameters of their constitutional and statutory authority, reviews all executive orders, drafts legal opinions of the attorney general, and comments on the constitutionality of pending legislation.
Effective Strategies for Managing Cybersecurity Breaches: How to Navigate State AG Investigations and Federal Agency Actions
By Troutman Pepper Locke State Attorneys General Team
Register Here
Thursday, September 25 • 1:00 – 3:10 p.m. ET
Stephen Piepgrass and Sadia Mirza, co-leaders of Troutman Pepper Locke’s Incidents + Investigations practice, along with Privacy + Cyber Partner Timothy St. George, will participate in an upcoming CLE with myLawCLE to examine the nuances of navigating cybersecurity breaches.
Growing Trend: State AGs Making Investigations Public
Chris Carlson, Blake Christopher, and Kyara Rivera Rivera of Troutman Pepper Locke discuss a recent trend of State AGs publicizing when they initiate an investigation and the considerations for companies on the receiving end.
State Attorneys General Step Up Enforcement With Regulatory Shift of Trump Administration
By
Ashley Taylor, Clayton Friedman, Michael Yaghi, Natalia Jacobo, and Jay Myers of Troutman Pepper Locke discuss stepped up enforcement efforts among state attorneys general in the face of the Trump administration’s broad deregulatory agenda and as federal agencies appear to shift litigation priorities.
Regulatory Oversight Podcast Updates
Understanding BBB Ratings: Strategic Approaches to Consumer Complaints
By
In this episode of Regulatory Oversight, Stephen Piepgrass, Michael Yaghi, and Dan Waltz conclude their two-part series on the Better Business Bureau (BBB). The group discusses strategies for managing and improving BBB ratings for businesses, while examining how consumer complaints impact potential regulatory actions. They emphasize the importance of addressing these consumer complaints promptly, highlighting the need for effective training and streamlining complaint handling processes within companies to prevent issues from being overlooked.
Federal Enforcement News
Allied Stone Inc. to Pay $12.4M to DOJ to Resolve FCA Claims
By
On August 19, the U.S. Department of Justice (DOJ) announced that Allied Stone Inc. (Allied Stone) and its president, Jia “Jerry” Lim, agreed to pay $12.4 million in settlement to resolve allegations that the company violated the False Claims Act (FCA) by evading, or conspiring to evade, antidumping and countervailing duties owed on quartz surface products imported from China. Allied Stone is a Dallas-based countertop and cabinetry supplier. According to the DOJ, Allied Stone misrepresented Chinese quartz surface products as other merchandise subject to lesser duties to avoid the applicable antidumping and countervailing duties. The company also allegedly failed to declare and pay, and failed to ensure that others were declaring and paying, applicable duties owed to the U.S. on entries of its Chinese quartz surface products.
Analogies to Federal Law in the State Regulatory Context
By
As the federal government pursues a deregulatory agenda, state regulators are increasing their enforcement activities to fill perceived gaps in oversight. They pursue their own regulatory agendas under state regulatory regimes that are often less developed than similar federal laws. This lack of existing state-level precedent opens the door for states to employ novel and aggressive legal theories that increase risk and uncertainty for private actors. Businesses should respond by evaluating opportunities to leverage the more comprehensive body of federal law as persuasive authority for previously unresolved questions of state law.
White House Seeks AI Progress Through De Minimis Regulation and Allocation of Federal Resources
By
On July 23, President Trump announced efforts to position the U.S. at the forefront of the global artificial intelligence (AI) race. “Winning the AI Race: America’s AI Action Plan” details how the federal government will advance the AI industry and was issued pursuant to the president’s January 23 Executive Order (EO) 14179, “Removing Barriers to American Leadership in Artificial Intelligence.”
New AGs On The Block
New AG on the Block: Governor Dunleavy Appoints Stephen J. Cox as Alaska AG
By
On Thursday, Governor Mike Dunleavy announced that Stephen J. Cox will become the attorney general (AG) of Alaska, effective Friday, August 29. Cox will replace Alaska AG Treg Taylor, who announced earlier this month that he would be stepping down to run for governor in the state’s 2026 general election.
Catherine Hanaway Appointed as Missouri AG
By
On Tuesday, Governor Mike Kehoe announced that Catherine Lucille Hanaway will become attorney general (AG) of Missouri on September 8. Her appointment follows the resignation of Andrew Bailey, who is stepping down to assume a federal role as co-deputy director of the Federal Bureau of Investigation (FBI).
Marketing and Advertising Updates
FTC Orders Match Group to Pay $14M Over Alleged Deceptive Subscription Practices and Guarantee Claims
By
On August 12, the Federal Trade Commission (FTC) ordered Match Group, owners and operators of online dating platforms such as Match.com, OkCupid, PlentyOfFish, The League, and others, to pay $14 million. This settlement resolves the FTC’s 2019 complaint accusing Match of misleading claims involving guarantees and onerous subscription cancellation processes, contrary to the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
Massachusetts AG Campbell Releases Business Guidance on “Junk Fee” and Auto-Renewal Regulations
By
Massachusetts Attorney General (AG) Andrea Joy Campbell has issued guidelines to help businesses comply with the recently enacted consumer protection regulations, prohibiting “junk fees” and providing consumers with greater transparency regarding trial and subscription offers. We previously covered these regulations in detail here.
Colorado AG Sues PetSmart Over TRAP Contracts
By
Colorado Attorney General (AG) Phil Weiser has sued PetSmart LLC, alleging that its use of Training Repayment Agreement Provisions (TRAPs) violates state consumer protection and labor laws. The lawsuit reflects a broader effort by Weiser and other state AGs to combat purportedly exploitive employment agreements.
AGs Demand End to Unlawful Robocalls Through “Operation Robocall Roundup”
By
In 2022, a bipartisan task force of 51 state attorneys general (AGs) was formed to investigate and take legal action against companies allegedly responsible for large volumes of fraudulent and illegal robocall traffic. North Carolina AG Jeff Jackson, Indiana AG Todd Rokita, and Ohio AG Dave Yost lead the “Anti-Robocall Litigation Task Force.” The task force is made up of AGs from both political parties.
Gaming Updates
Kalshi Faces Regulatory Scrutiny and Litigation From Several Angles
By
In addition to receiving cease-and-desist orders from several states (Arizona, Illinois, Montana, and Ohio), and ongoing litigation against New Jersey state gaming regulators in the U.S. Court of Appeals for the Third Circuit, KalshiEx LLC (Kalshi) is also now embroiled in litigation with regulators in Maryland and Nevada. Kalshi operates as a designated contract market, which allows adults in all 50 states to make financial trades on a broad range of topics — from sports to the weather.
BBB Updates
Arizona AG and BBB Launch Education Campaign on Modern Consumer Scams
By
On June 18, Arizona Attorney General (AG) Kris Mayes, in partnership with the Better Business Bureau (BBB), announced a new consumer educational campaign aimed at teaching Arizona residents how to avoid falling victim to a variety of scams. The education campaign targets consumers lacking awareness of such scams, especially senior citizens. The series of video public service announcements (PSAs) aims to enable Arizona consumers to spot and avoid scams on their own. According to the FBI Internet Crime Complaint Center, Arizona residents lost approximately $392 million due to consumer fraud in 2024. The AG’s office received almost 22,000 consumer complaints, answered more than 28,000 phone calls, and reviewed more than 23,000 emails from consumers regarding potential fraud during this time.
Data + Privacy Updates
New Jersey’s Data Deletion Law: Implications for Resold or Re-leased Vehicles
By
On July 28, the New Jersey Division of Consumer Affairs issued a reminder to more than 3,000 auto dealerships regarding their obligations under the New Jersey data deletion law, N.J.S.A. § 56:12-18.1. This law, enacted and effective in January 2024, requires dealerships to offer data deletion services for consumer information stored in vehicles accepted for resale or lease. Dealerships are now on notice of their compliance obligations under the law.
Streaming Under Scrutiny: Roku’s Response to Michigan AG’s Allegations of COPPA and Other Privacy Law Violations
By
On April 29, Michigan Attorney General (AG) Dana Nessel filed a lawsuit against Roku, Inc. (Roku), the smart TV and device provider and streaming service, alleging Roku violated the Children’s Online Privacy Protection Act (COPPA), federal and state privacy laws, the Michigan Consumer Protection Act, and other laws by collecting children’s personal data and selling it without proper parental consent. The lawsuit sought damages and equitable relief on behalf of Michigan consumers who subscribed to Roku’s streaming service. More information regarding this lawsuit can be found here.
Health Sciences and Pharmaceuticals Updates
Understanding the Impact of HCA Healthcare’s Settlement
By
What Happened
HCA Healthcare Inc., a major U.S. hospital operator with more than 180 hospitals across 20 states, announced a $3.5 million settlement to address allegations of state consumer protection and labor law violations brought by the attorneys general (AG) of California, Colorado, and Nevada. The allegations centered on HCA’s enforcement of training repayment agreements (TRAs) with new nurses.
State AGs Join $202M Settlement Over HIV Drug Kickback
By
On July 16, 49 attorneys general (AGs) announced that they joined a $202 million settlement with Gilead Sciences, Inc. (Gilead). Previously announced by the Department of Justice in April, the settlement resolved allegations that the company incentivized doctors to prescribe its medication through HIV speaker programs.
Antitrust Updates
Florida AG Announces Investigations Into Climate Scoring Organizations
By
What Happened
On July 28, Florida Attorney General (AG) James Uthmeier announced investigations into two environmental, social, and governance (ESG) scoring organizations for potential violations of state consumer protection and antitrust laws. This investigation is consistent with a continuing trend among Republican AGs to scrutinize entities directly and indirectly involved in encouraging ESG-based initiatives. For example, in the last three years, Republican AGs have targeted the Net-Zero Banking Alliance and the Net-Zero Asset Managers over antitrust and fiduciary duty concerns related to ESG. Membership in both organizations dwindled as a result.
Tobacco and Nicotine Updates
FDA Sues Over Years-Long Internal Review of Flavored ENDS MDO
By
On August 21, 2025, NJOY, LLC (NJOY), a subsidiary of Altria Group, Inc., sued the U.S. Food and Drug Administration (FDA), alleging that the agency has unlawfully delayed rendering a decision on supervisory review of its June 2022 marketing denial order (MDO) for certain flavored, disposable electronic nicotine delivery systems (ENDS).
Court Denies Indian Tribe’s Injunction Request Pending Appeal in PACT Act Case
By
We recently wrote about a federal case here and here involving key issues related to the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) authority to enforce the Prevent All Cigarette Trafficking Act (PACT Act) against federally recognized Indian tribes and ATF’s interpretation of key sections of the PACT Act. In addition to appealing the U.S. District Court for the Central District of California’s decision, we noted that the Twenty-Nine Palms Band of Mission Indians (the Tribe) asked the district court to require ATF to remove it from the agency’s PACT Act noncompliant list (NCL) and prevent ATF and the other defendant, the Department of Justice from taking action against it pending its appeal before the U.S. Court of Appeals for the Ninth Circuit. On July 30, the federal district court denied the Tribe’s request.
FDA Tobacco Civil Money Penalty Provisions Ruled Unconstitutional, but Not Enjoined Nationwide
By
In early August, the U.S. District Court for the Northern District of Texas ruled that the civil money penalty (CMP) provision in the Food, Drug, and Cosmetic Act (FDCA) for tobacco products, 21 U.S.C. § 333(f)(9), is unconstitutional. Specifically, the court found that the FDCA improperly allows the U.S. Food and Drug Administration (FDA) to bring an administrative action to collect CMPs because the Seventh Amendment guarantees the right to a jury trial in such cases.
Cannabis Regulatory Updates
Bipartisan State AGs Urge Congress to Grant Access to Federally Regulated Banking and Financial Services to State-Regulated Cannabis Businesses
By
In July 2025, a bipartisan coalition of 32 state and territorial attorneys general (AG) sent a letter to congressional leaders urging the passage of the Secure and Fair Enforcement Regulation (SAFER) Banking Act. Their letter emphasizes that the legislation — a long-stalled federal reform — would provide legal clarity and a safe harbor for banks and financial institutions to serve state-licensed cannabis businesses. Such clarity, they argue, is urgently needed to address public safety risks and to improve the states’ ability to regulate and tax the booming cannabis industry.
Stephanie Kozol, Senior Government Relations Manager – State Attorneys General, also contributed to this newsletter.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law.
This article originally appeared in the September 2025 Private Equity International Secondaries report and is reposted with permission.
Continuation vehicles are constantly developing as key tools for GPs and LPs alike, say Stephanie Pindyck-Costantino and P. Thao Le at Troutman Pepper Locke.
How would you describe the current state of secondaries market dealflow, and what are the principal drivers of activity?
Stephanie Pindyck-Costantino: Overall, the current state of the secondaries market remains strong. Last year was a very active 12 months, and we are seeing a very robust market in 2025 as sponsors continue to look for viable exit opportunities.
Secondaries – and continuation vehicles, in particular – is proving to be a useful tool for both sponsors and investors. Depending on the value remaining in a particular asset or portfolio of assets, many investors in the original investment structure may find a continuation vehicle appealing.
Thao Le: There are a lot of private equity funds coming to the end of their terms at the moment. Even funds formed only a few years ago have assets that really need to be liquidated to meet LP demands for liquidity, so there are many sponsors open to doing those deals.
At the same time, while private equity fundraising has been relatively strong over the last few years, M&A activity has been choppy during the last 12 months, all of which means there is a lot of dry powder available for deployment. We have buyside sponsors looking for appealing assets they can buy at a discount compared with what they could achieve in full-blown auction processes or via typical M&A transactions.
Overall, the secondaries market is being viewed as a vital tool for portfolio management and liquidity management – for investors as well as sponsors.
What trends are you observing in the market?
SPC: Broadly speaking, many asset classes are experiencing longer hold periods as sponsors continue to seek avenues to provide value. We are seeing numerous assets come to market that are a subset of a larger multi-asset portfolio where the sponsor believes there is value to be derived.
There are some geographies that are not attracting as much investor interest right now, but sector-wise, the appetite is pretty broad. Industries like healthcare and industrials, alongside key sectors of energy and real estate, continue to be of interest.
TL: More broadly, we are all going to have to consider how certain asset classes will react to the US administration’s tariff policies, as well as the response of other countries to those policies. If sponsors have portfolio companies that are susceptible to tariffs, we will probably see sponsors critically reviewing those portfolio companies and mapping out a holding or exit strategy for them.
In certain circumstances, the question will come down to whether the sponsor can hold the portfolio company for a successful long run if tariffs will have an adverse impact on its supply chain and profitability. Industrials and manufacturing, as well as companies that rely on cross-border supply chains, could increase their appetite for secondaries as a result. We will likely start to see more of those assets coming to market as sponsors look for creative ways to address current market challenges.
SPC: We also see a lot of discussion around various tax regimes, both domestic and abroad, and what they mean for various asset classes and entities that hold different types of assets. The impact of those regimes will vary depending on the location of the assets, the location of buyers and sellers, the holding period for the assets, and how investment in those assets was structured. We are seeing robust discussions about restructuring as sponsors try to anticipate what might be coming down the line from a policy perspective. Lastly, from an asset class point of view, we are seeing a lot of interest in private credit secondaries.
What do these trends mean for terms and structuring in the market today?
SPC: There is a lot of uncertainty in the market at the moment; on these deals, you have a lot of different players navigating different considerations, whether on the buyside or the sponsor side. Whether a fund is closed-end or open-end, there is always a lot to think about.
Right now, we see a lot of participants who are no longer able to apply a wait-and-see mentality; and as a result are running up against deadline pressures. Many managers took a wait-and-see approach during the covid-19 pandemic, as well as through the many macroeconomic and geopolitical challenges that we have seen since. Now, they are trying to navigate and structure deals in a way that both allows flexibility and addresses what needs to be done.
As an industry, we like to deeply understand situations and know exactly what is going on. However, today, sponsors are having to ask LPs to trust them and allow some flexibility. Valuations are adding further uncertainty on top of that, so there are various challenges to navigate. All of this means there is some tension in negotiations – this is driven by the uncertainty of outside issues, both in the market and in terms of the way these frameworks are going to be governed.
TL: There are a variety of challenges and potential conflicts of interests to secondaries, particularly if it is a sponsor-led secondaries deal involving a continuation vehicle. For example, consideration must be given to the economics that are charged to new investors in a continuation vehicle, as well as the existing LPs rolling their interests in an asset to the CV.
We see sponsors following guidelines published by the Institutional Limited Partners Association on issues surrounding continuation vehicles – for example, the fact that existing LPs should have the same economics as they had in the original fund. However, those economics may be contrary to what new investors are charged: the sponsor may be charging a management fee and carry, but not at the same rate it is charging to the rolling LPs. The different economics charged to new investors could, however, be justified as part of the cost of access to a secondaries transaction.
When structuring secondaries transactions, it is incredibly important to provide existing LPs with transparent information and ensure they are not disadvantaged. Each transaction is very bespoke and has to be structured according to the specific requirements of the various stakeholders.
How are appetites for continuation vehicles evolving on the buyside?
TL: On this side of the market, if you have an existing fund that may sell a particular asset to a continuation vehicle, a sponsor may approach key LPs to discuss their appetite. Sometimes, one of those institutional LPs will take the lead on a secondaries transaction if they believe in the asset and its growth story. From a fundraising perspective, that can help the sponsor move forward with the continuation fund.
On the buyside, you could have an investor that sees a great asset – mature, but still with the potential for further growth – and is able to buy at a very competitive price without having to participate in a process. They will be able to make the investment with a smaller equity cheque and not need any additional financing.
As a result, we see increased appetite for continuation funds from buyers, with funds being formed purely for the purposes of doing secondaries.
SPC: We do see a lot of LPs specifically looking for secondaries opportunities, particularly where they have identified what tend to be called ‘sweetheart assets.’ We see investors spotting an opportunity to focus on one or two investments that really fit a niche for them – that is an increasingly attractive way of investing.
Where do you expect to see the most activity in the second half of the year and going into 2026?
TL: We have a positive outlook on the secondaries market. It is a very active market right now, and that isn’t going to slow down any time soon.
Whether next year’s activity is driven by sponsors or not, we expect there will be a lot going on in sectors like industrials and healthcare – in part because of how many changes in policy are coming from the current US administration. Hopefully, we will soon have a better indication of what credit markets are going to look like moving into 2026 and whether or not there will be more stability in the credit markets, which should drive more M&A activity.
There also appears to be increasing appetite for multi-asset continuation funds. It will be interesting to see what this appetite really looks like compared with a traditional private equity fund – we haven’t seen a lot of multi-asset continuation funds to date, but there is certainly a lot more talk about them.
SC: We are also expecting to see real, ongoing growth in the use of continuation funds and GP-led secondaries, in part because of the lack of predictable debt markets, which is requiring GPs to self-fund. As we see the market and teams maturing, and as teams look to streamline what they do and maybe spin off lines of business, we could see that driving more multi-asset deals. That streamlining may be further fuelled if we enter a more challenging time in the economy.
In short, however the market develops, these tools look set to stay. We can expect plenty of further evolution in how they are applied to address the changing nature of both GP and LP challenges.
On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit affirmed a ruling by the U.S. Court of International Trade, holding that President Trump overstepped the authority provided by Congress under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA) to impose broad tariffs aimed at addressing drug trafficking, illegal migration, and international trade imbalances. The court deemed unlawful those tariffs imposed on Canada, Mexico, and China meant to curb the flow of illicit drugs and illegal migration, and reciprocal tariffs imposed on dozens of countries throughout the world to curb trade imbalances (collectively, the IEEPA Tariffs).
Although the Federal Circuit deemed the tariffs unlawful, it left them in place until October 14 to provide the administration with the opportunity to appeal the ruling to the Supreme Court. If the administration appeals the ruling, the tariffs will remain in place until either (i) the Supreme Court denies review, or (ii) if the Court accepts review, then until the Court issues a judgment. This means that companies importing goods will be subject to existing tariffs for at least another six weeks, but, given the likelihood of appeal, potentially much longer, pending Supreme Court review.
What Is IEEPA?
IEEPA in essence provides the president with the authority to regulate international economic transactions to combat an “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.” A brief discussion on the legal implications of IEEPA can be found here. Historically, IEEPA has been used primarily as a sanctions tool, allowing the president to block property and prohibit transactions, including restricting trade with specific countries or persons. It has not, however, been used as a general vehicle for imposing tariffs or duties on imports, which are traditionally considered a form of taxation reserved for Congress under Article I of the Constitution. Indeed, no previous president has leveraged IEEPA to impose tariffs.
The Lawsuit and Court of International Trade Decision
In the first few months after taking office, President Trump issued a series of executive orders and proclamations, discussed in detail here and here, imposing tariffs under the authority of IEEPA.[1] As justification for imposing these tariffs under IEEPA, the administration declared national emergencies, citing an influx of illicit drugs and illegal immigration flowing across the northern and southern borders into the U.S., as well as persistent trade deficits.
After a group of small businesses filed suit in the Court of International Trade challenging the invocation of IEEPA as a basis for these sweeping tariffs (later joined by a group of 12 states), the court ruled on May 28 that IEEPA does not authorize the IEEPA Tariffs. See our discussion of the case here. The court set aside the tariffs and permanently enjoined their enforcement. The Trump administration, however, immediately appealed the decision to the Federal Circuit, and the court’s holding was stayed pending the appeal’s outcome.
The Federal Circuit Decision
During oral argument, attorneys for President Trump argued that Congress has long given the president broad discretion to confront national emergencies, including trade imbalances. The administration focused on IEEPA’s granting of authority to “regulate . . . importation,” which, according to the government, necessarily includes tariffs. The administration also argued that IEEPA allows the president “to take extraordinary action,” and that the courts could not second guess a president’s declaration of a national emergency.
The Federal Circuit affirmed the Court of International Trade’s holding[2] that the IEEPA Tariffs exceeded the authority delegated to the president under IEEPA.[3] The majority focused on the text of IEEPA, which authorizes the president to “regulate” importation and exportation of property but does not refer to “tariffs” or synonymous language like “duties” or “taxes.” The majority found that, without explicit delegation by Congress of a power to impose tariffs, IEEPA’s grant of presidential power to “regulate” imports does not unambiguously include the power to impose broad, indefinite tariffs. The court was also swayed by precedent, recognizing that in the nearly 50 years since its promulgation, no other president has invoked IEEPA to impose tariffs or adjust tariff rates.
The ruling affects both the country-by-country “reciprocal” tariffs, which have been imposed on many countries at varying rates, as well as the tariffs imposed on some goods from Canada, China, and Mexico for what the Trump administration said was a failure on the part of those countries to curb fentanyl imports and uncontrolled immigration. Importantly, tariffs imposed under other laws, such as tariffs on steel and aluminum, copper, and automobiles and automotive parts, imposed under Section 232 of the Trade Expansion Act, and tariffs targeting unfair trade practices imposed under Section 301 of the Trade Act of 1974, are not impacted by the court’s decision.
While the majority opinion deemed the IEEPA Tariffs unlawful, the decision comes with important limitations. First, the opinion addresses only whether the IEEPA Tariffs imposed by the challenged executive orders are authorized by IEEPA (concluding that they are not), rather than addressing the broader question of whether IEEPA authorizes any tariffs at all. Second, the court allowed the tariffs to remain in place through October 14, 2025, to give the Trump administration a chance to appeal to the U.S. Supreme Court. Third, the court remanded the case on the issue of whether a nationwide and universal injunction was appropriate relief in light of the Supreme Court’s recent ruling regarding birthright citizenship.[4] Thus, the trade court will still need to wrestle with whether the IEEPA Tariffs are unlawful as to all, or only those plaintiffs who challenged the tariffs.
The Trump administration has indicated it will appeal the case to the U.S. Supreme Court.
What Does the Ruling Mean?
The U.S. has brought in more than $100 billion in revenue from tariffs through August 2025.[5] For those in the construction industry, project stakeholders have been wrestling with the risks and responsibilities for bearing tariffs for months and have included varying contingencies and risk-allocation strategies in their current contracts and for future projects. The Federal Circuit’s ruling adds a new wrinkle and uncertainty to an ever-fluctuating legal and business landscape of the new tariff era.
Parties now must navigate an environment where tariffs affecting their supply chains, businesses, and projects have been deemed unlawful, yet remain in place and are still being collected for at least another six weeks. This period will likely be extended upon appeal to the Supreme Court, as the Federal Circuit ordered that the tariffs remain in place until the Supreme Court issues a judgment.
Companies should revisit their supplier agreements and supply chains to evaluate whether the IEEPA Tariffs impact their businesses and projects. It is critical to take steps now to run comprehensive analyses that will help identify ways for companies to prepare for this new uncertainty. Parties should also closely examine their contracts for provisions regarding changes in law, and whether their contracts address those situations where a law existing at the time of contract is changed.
Furthermore, if the Supreme Court affirms the Federal Circuit’s decision, affected businesses could seek reimbursement or refund of tariffs already paid through administrative protests with the Customs and Border Protection under 19 U.S.C. § 1514 and seeking refunds under 19 U.S.C. § 1520. It remains to be seen, however, if the trade court’s decision remains as a universal injunction and whether non-litigation entities will be permitted to seek this type of comprehensive relief. Although not directly addressed in the Federal Circuit’s opinion, the potential to reclaim costs paid under the stricken tariffs should be a major consideration for businesses. Companies should closely monitor the trade court’s decision on remand determining whether the ruling deeming the IEEPA Tariffs unlawful will be given universal effect.
In the short term, businesses should remain both vigilant and adaptable. Strategic planning should include contingency measures to address potential changes in tariff regulations. It is never too early to begin strategic discussions with both current and future project stakeholders to develop contingencies and prepare for the next tariff ruling.
Troutman Pepper Locke has a dedicated Tariff + Trade Task Force to aid our clients in navigating and anticipating the impacts that evolving tariffs have on their businesses. As your business develops strategies to mitigate continued tariff uncertainty, the Troutman Pepper Locke Tariff + Trade Task Force and Construction Practice Group are here to help guide you through the process.
[1] See Executive Orders 14193 (“Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border” (issued Feb. 1, 2025)), 14194 (“Imposing Duties To Address the Situation at Our Southern Border” (issued Feb. 1, 2025)), 14195 (“Imposing Duties To Address the Synthetic Opioid Supply Chain in the People’s Republic of China” (issued Feb. 1, 2025)), 14197 (“Progress on the Situation at Our Northern Border” (issued Feb. 3, 2025)), 14198 (“Progress on the Situation at Our Southern Border” (issued Feb. 3, 2025)), 14227 (“Amendment to Duties To Address the Situation at Our Southern Border” (issued Mar. 2, 2025)), 14231 (“Amendment to Duties To Address the Flow of Illicit Drugs Across Our Northern Border” (issued Mar. 6, 2025)), 14257 (“Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits” a.k.a. “Liberation Day Tariffs” (issued Apr. 2, 2025)), 14266 (“Modifying Reciprocal Tariff Rates To Reflect Trading Partner Retaliation and Alignment” (issued Apr. 9, 2025)), 14316 (“Extending the Modification of the Reciprocal Tariff Rates” (issued Jul. 7, 2025)), 14326 (“Further Modifying the Reciprocal Tariff Rates” (issued Jul. 31, 2025)), and 14334 (“Further Modifying Reciprocal Tariff Rates to Reflect Ongoing Discussions with the People’s Republic of China” (issued Aug. 11, 2025)). Throughout its opinion, the court refers to these executive orders collectively as the “Challenged Executive Orders.”
[2] See V.O.S. Selections, Inc. v. United States, 772 F. Supp. 3d 1350 (Ct. Intl. Trade 2025).
[3] See V.O.S. Selections, Inc. v. United States, No. 25-1812 at 44 (Fed. Cir. Aug. 29, 2025).
[4] See Trump v. Casa, Inc., 145 S. Ct. 2540 (2025).
[5] https://www.piie.com/research/piie-charts/2025/trumps-tariff-revenue-tracker-how-much-us-collecting-which-imports-are. See also Fiscal Data, July 2025 Monthly Treasury Statement, U.S. Treasury (Aug. 29, 2025), https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/receipts-of-the-u-s-government (claiming a $141,732,686,796.90 “Current Fiscal Year to Date Gross Receipts Amount” in Customs Duties).