“I-dentical.” With a clap for emphasis and a wave of two hands, this phrase became one of the more memorable quotes from a trial. Although, in this case, it was a trial made for Hollywood, where Joe Pesci, a New York attorney, represents his cousin and a friend in their defense against murder charges in rural Alabama. It’s the beloved movie, My Cousin Vinny.
The film is notable for many reasons, but the prosecutor’s hilarious use of “i-dentical” to compare the skid marks at the scene of the crime and the tires on the cousin’s vehicle is especially memorable. While protection and enforcement of trademark rights have little to do with the expert comparison of tires and their skid marks as it did in My Cousin Vinny, they do involve “i-dentical” trademarks, and even trademarks that are simply similar.
When the U.S. Patent and Trademark Office (USPTO) considers an application for federal registration of a trademark, or when a court reviews whether one trademark infringes upon another, the central consideration is whether consumers are likely to be confused. This likelihood of confusion test involves several factors, including the similarities of the appearance of the trademarks, the goods and/or services, the consumers, and the trade channels.
Clients often identify unauthorized use of their trademark that is likely to cause consumer confusion. However, our team can also assist with engaging third-party services that monitor U.S. and international trademark offices, as well as the internet, for similar (or identical) trademarks that may infringe a client’s prior trademark rights.
Once a confusingly similar trademark is identified, there are several channels to enforce prior rights in a trademark as part of a comprehensive trademark enforcement plan, including:
Cease-and-Desist Letters and Federal Court Actions. A cease-and-desist letter is often the first step in asserting prior trademark rights. Such letters put the newcomer on notice of your rights in the trademark and threaten legal action if the infringer does not comply with the letter’s demands. Cease-and-desist letters can be effective at quickly ending the unauthorized use of a trademark.
If an unauthorized user ignores the demands or refuses to cooperate, it may be necessary to escalate the matter and file a trademark infringement action in federal court. A successful trademark infringement action can result in injunctive relief that prohibits the infringer from using the trademark and may include a damages award and costs. In certain circumstances, the award may include attorneys’ fees and treble damages.
Letters of Protest and Trademark Trial and Appeal Board Proceedings. If the unauthorized use is the subject of a federal trademark application or registration, the USPTO also offers mechanisms to challenge the registration of the trademark. For an application under review by the USPTO, there is an option to submit a letter of protest. This action brings the application to the USPTO’s attention, and the USPTO may issue a refusal to register the trademark if it agrees with the evidence set forth in the letter of protest.
In some situations, however, it is preferable to wait until the application publishes, at which time an opposition proceeding may be filed with the Trademark Trial and Appeal Board (TTAB). If, however, an infringing trademark is identified at the USPTO following registration, the required proceeding is a cancellation proceeding, rather than an opposition proceeding. Opposition and cancellation proceedings include similar procedural aspects to federal court litigation but are often more efficient and cost-effective. If an opposition or cancellation proceeding moves forward to completion and is successful, the application will be denied registration in an opposition proceeding, and the registration will be canceled in a cancellation proceeding.
Notwithstanding, TTAB proceedings can also be an invaluable tool to initiate discussions with the unauthorized user regarding parameters for the unauthorized user’s use of a trademark to avoid consumer confusion. In certain circumstances, this approach may offer a preferable business resolution.
Social Media Takedowns. Major social media platforms, such as Facebook, Instagram, and X, as well as many minor social media sites, provide a process to submit a takedown notice to remove an unauthorized use of a trademark from the social media site. While some of these platforms, such as Facebook and Instagram, generally require a federal trademark registration to review a takedown notice, clients who identify an unauthorized use of their trademark on a social media site should consider this option. The form for submitting the takedown notice is often short, making this an efficient means to eradicate infringing trademarks on social media sites. Furthermore, representation by an attorney can assist clients in navigating any pushback that may be received from such social media platforms.
Customs Enforcement. Clients who are concerned about the importation of goods bearing an infringing trademark and have registered the trademark with the USPTO may record the federal trademark registration with the U.S. Customs and Border Protection (CBP). Through this program, the CBP may detain, seize, forfeit, and destroy products entering the U.S. that bear an infringing trademark. The costs to join this program are minimal and can serve as a key defense against the sales of goods bearing an infringing or counterfeit trademark in the U.S.
Identification of an “i-dentical” or similar trademark often results in the same type of lightbulb moment that the attorney in My Cousin Vinny hoped to evoke in the jury. Oftentimes, the realization that the brand and its reputation are being diminished by the unauthorized use can result in annoyance and even panic. Although certainly frustrating to a trademark owner, there are numerous options, as outlined, to enforce one’s prior rights in its trademark to protect consumers from confusion. Each approach is part of a comprehensive trademark enforcement plan that can strengthen the brand and its reputation.
In Ban v. Manheim, the Delaware Court of Chancery held that the exercise of a call right against a stockholder of a Delaware corporation was invalid under Section 202 of the Delaware General Corporation Law (DGCL) because the call right had been imposed after the stockholder’s shares had already been issued. The court’s holding aligns with the plain language of Section 202 of the DGCL but serves as a helpful reminder to practitioners and Delaware corporations alike when structuring transfer restrictions, including call rights.
In 2012, Young Min Ban (Ban) acquired an indirect ownership interest in Delaware Valley Regional Center, LLC (DVRC), which was managed by Joseph Manheim (Manheim) through West 36th, Inc. (WestCo). Ban owned 15% of WestCo and 33% of Penfold, L.P. (Penfold), which, in turn, owned 90% of DVRC, with the balance of DVRC owned by WestCo. In 2018, Manheim, anticipating disputes, unilaterally amended DVRC’s limited liability company agreement to add a redemption right, which allowed WestCo to redeem a member’s interest if it determined that the member’s involvement could cause a material adverse effect, at the lesser of appraised value or the applicable capital account balance. In 2022, Manheim unilaterally adopted a new bylaw for WestCo (the WestCo call right), allowing Manheim as WestCo’s controlling stockholder to force minority shareholders to sell their shares at a “fair value” determined by Manheim. Shortly thereafter, Manheim exercised both rights to eliminate Ban’s interests (both indirectly through his ownership in Penfold and directly through his ownership in WestCo), and, according to the court, set prices arbitrarily low and without independent valuation or negotiation. Ban then filed actions to challenge the forced purchase of his ownership interests.
The court held that Manheim’s forced purchase of Ban’s indirect interest held through Penfold was a self-interested transaction and not entirely fair. The court also held that the WestCo call right was invalid under Section 202(b) of the DGCL because transfer restrictions (including forced sale rights and call rights) cannot be imposed on already-issued shares unless the affected stockholder has consented to the restriction. The court found that Ban had never agreed to or voted for the WestCo call right. Therefore, Manheim’s attempt to force Ban to sell his shares was statutorily invalid.
On August 20, 2025, the U.S. District Court for the Northern District of West Virginia issued an opinion holding Section E of West Virginia’s Daniel’s Law — which created a private cause of action for unauthorized disclosure of addresses and phone numbers of judges and law enforcement officers — facially unconstitutional in violation of the First Amendment. Applying strict scrutiny because the law regulates the content of truthful, noncommercial speech, the district court held the law was not narrowly tailored because it authorized damages with no notification requirement or predicate of injunctive relief and failed to contain any knowledge or state of mind requirement to establish a violation. This decision — and the outcome of the appeal that is expected to follow — will have important ramifications for the viability of the Daniel’s Laws enacted in numerous states[1] across the U.S. since 2021, in the wake of tragic murder of Daniel Anderl, son of New Jersey District Judge Esther Salas.
Summary of the Decision
Modeled on New Jersey’s Daniel’s Law, West Virginia’s law was enacted in 2021 in order to “enhance the safety and security of certain public officials in the justice system” and “to foster the ability of these public servants . . . to carry out their official duties without fear of personal reprisal from affected individuals related to the performance of their public functions.”[2] In 2024, five putative class actions were filed against data industry defendants under Section E of West Virginia’s version of Daniel’s Law, which provides:
Unless written permission is first obtained from the individual, a person, business or association shall not disclose, redisclose, or otherwise make available the home address or unpublished home or personal telephone number of any active, formerly active, or retired judicial officer, prosecutor, federal or state public defender, federal or state assistant public defender, or law enforcement officer under circumstances in which a reasonable person would believe that providing such information would expose another to harassment or risk of harm to life or property.
W. Va. Code § 5A-8-24(e).
The lawsuits alleged the defendants were violating Daniel’s Law by disclosing the home address and unpublished phone numbers of individuals covered by the law, in violation of Section E. The lawsuits further alleged that the disclosure of information protected by Daniel’s Law exposed the plaintiff to harassment and risk of harm to life and property, and sought to recover statutory damages of $1,000 per violation, along with attorneys’ fees and litigation costs.
After removing the cases to federal court, the defendants filed a consolidated motion to dismiss, arguing “Section E of West Virginia’s Daniel’s Law is unconstitutional under the First and Fourteenth Amendments, either as a content-based regulation of speech subject to strict scrutiny or under any level of scrutiny, and [] that Section E of West Virginia’s Daniel’s Law is unconstitutional under the Due Process Clause of the Fourteenth Amendment due to vagueness.”[3]
The plaintiff opposed the motion, arguing Section E of Daniel’s Law was not subject to strict scrutiny because it did not have a nexus to viewpoint discrimination, was not intended to suppress substantive communications, only regulates commercial speech, and was a privacy statute subject to the standard articulated by the U.S. Supreme Court in The Florida Star v. B.J.F., 491 U.S. 524 (1989) and Smith v. Daily Mail Publishing Co., 443 U.S. 97 (1979) (Florida Star Standard). Under the Florida Star Standard, the Supreme Court found that lawfully obtained, truthful information about a matter of public significance remains highly protected speech, absent a showing that the statute is narrowly tailored to advance a state interest of the highest order.[4]
In a 44-page opinion, the district court rejected the plaintiff’s arguments. It found Section E of Daniel’s Law was unquestionably a content-based restriction on speech subject to strict scrutiny because it regulates the “communicative content,” or “topic,” or “subject matter” of the speech.[5] In reaching this conclusion, the district court noted that “disclosing an address or phone number states a fact that could be used for any number of noneconomic purposes” and therefore Daniel’s Law regulated far more than just commercial speech.[6]
The district court also explained why the Florida Star Standard did not apply. It found Florida Star and Daily Mail were factually distinguishable because both cases involved newspapers publishing sensitive information (i.e., the name of a rape victim and the name of a juvenile offender along with intimate details of ongoing criminal proceedings), which were not analogous to the addresses or phone number information of judges and law enforcement officials.[7] The district court reasoned that the Florida Star Standard had been rejected by various courts, including the Ninth Circuit in MDb.com Inc. v. Becerra, [8] and the Fourth Circuit in Am. Ass’n of Pol. Consultants v. FCC.[9] Both circuits applied strict scrutiny because courts should be reluctant to cordon off new categories of speech for reduced protection unless it is part of a long tradition of proscription.[10]
Moreover, the district court found, even if the Florida Star Standard was applicable, it was similar to the strict scrutiny standard and did not help the plaintiff’s position because the Florida Star Standard was intended to “bolster First Amendment scrutiny, not to reduce it.”[11] In this regard, the district court recognized the Supreme Court has never used the Florida Star Standard to justify restricting the freedom to publish truthful information.[12]
Turning to the strict scrutiny analysis, the court agreed Daniel’s Law serves a compelling state interest, which was not contested by the parties. However, it concluded Section E failed the narrow tailoring requirement because less restrictive alternatives of achieving the state’s interests exist without “burden[ing] more speech than necessary to protect the safety of judicial and law enforcement officers.” In particular, the court focused on the absence of any notice requirement of a violation of the law to the speaker, [13] as well as the absence of any knowledge requirement, [14] noting the “Supreme Court has specifically recognized the tendency of statutes restricting speech without a knowledge requirement to exert a chilling effect” on constitutionally protected speech.[15] Ultimately, the court concluded that “because Section E of West Virginia’s Daniel’s Law lacks any mechanism, such as a notice requirement or knowledge element, that could narrowly tailor the provision to West Virginia’s compelling interest in protecting judicial and law enforcement officers, Section E of Daniel’s Law fails strict scrutiny and is unconstitutional.”[16]
Throughout the opinion, the court discussed the recent District Court of New Jersey decision in Atlas Data Privacy Corp. v. We Inform LLC, 758 F. Supp. 3d 322 (2024) and New Jersey Supreme Court’s decision in Kratovil v. City of New Brunswick, 261 N.J. 1 (2025), which both denied facial First Amendment challenges to New Jersey’s version of Daniel’s Law. [17][18] While the court expressed agreement with certain conclusions reached in both decisions, including that New Jersey’s Daniel’s Law was a restriction of speech, the court’s analysis diverged on the applicability of strict scrutiny.[19] In particular, the court found strict scrutiny applicable, noting it was “not sway[ed]” by the ruling in Atlas Data Privacy Corp. that the three-factor balancing test in Florida Star was the applicable standard to evaluate privacy statutes.[20] Likewise, the court found the application of the Florida Star Standard in Kratovil “did not dissuade the court from applying ordinary strict scrutiny” because the facts in Kratovil closely resembled the facts in Florida Star and were distinguishable from the facts at hand.[21]
Takeaways
The Jackson decision recognizes that regardless of the noble purpose of a law, a content-based restriction on constitutionally protected speech must be narrowly tailored to withstand First Amendment scrutiny. This holding is important in the context of Daniel’s Law challenges, which share the same problematic features as West Virginia’s law. As the Jackson court noted, many other states’ versions of Daniel’s Law create a private cause of action for damages only after notice is given to the disclosing party[22] and contain a scienter requirement, which were provisions missing from West Virginia’s Daniel’s Law and undermining the assertion that the statute was narrowly tailored.[23]
There is little doubt that the Jackson decision will be appealed to the Fourth Circuit Court of Appeals. The Jackson decision also may have implications on the Third Circuit Court of Appeals’ pending review of the appeal involving a facial challenge to New Jersey’s version of Daniel’s Law, in Atlas Data Privacy Corp. v. We Inform LLC, No. 24-8047 (3d Cir. 2024). In Atlas Data Privacy Corp., the District of New Jersey applied the Florida Star Standard to New Jersey’s version of Daniel’s Law and denied a First Amendment facial challenge brought by defendant businesses who challenged New Jersey Daniel’s Law on grounds similar to those presented in Jackson. While West Virginia’s and New Jersey’s versions of Daniel’s Law have important differences, both statutes are content-based restrictions on speech and both lack a scienter requirement, which the Supreme Court notes, and the West Virginia District Court found, has a chilling effect on speech. If the Third Circuit affirms the New Jersey District Court’s order upholding the constitutionality of the law, the Supreme Court may choose to review the issue to provide guidance on the appropriate standard to be applied to laws seeking to curtail the freedom to publish truthful information.
While the Jackson decision focuses on Section E of West Virginia’s Daniel’s Law, it could impact other statutes that seek to restrict the publication of truthful information. As challenges to Daniel’s Law proceed through the courts and as state legislators seek to adopt similar versions of the law, time will tell what impact the Jackson decision will have on pending cases and future legislation.
[1] https://www.troutman.com/insights/maryland-enacts-the-judge-andrew-f-wilkinson-judicial-security-act-are-more-daniels-laws-on-the-horizon.html.
[2] W. Va. Code § 5A-8-24(b).
[3] Jackson v. Whitepages, Inc., No. 1:24-cv-80, at 11 (N.D. W. Va. Aug. 19, 2025).
[4] Florida Star, 491 U.S. at 530-31.
[5] Jackson v. Whitepages, Inc., No. 1:24-cv-80, at 18 (N.D. W. Va. Aug. 19, 2025)
[6] Id. at 21.
[7] Id., at 23.
[8] 962 F.3d 1111 (9th Cir. 2020).
[9] 923 F.3d 159 (4th Cir. 2019).
[10] Jackson at 24.
[11] Id., at 26.
[12] Id. at 26.
[13] Id. at 37-38.
[14] Id. at 33-35.
[15] Id. at 40.
[16] Id. at 41-42.
[17] 758 F. Supp. 3d at 341-42.
[18] 261 N.J. 1 (2025)
[19] Jackson at 16.
[20] Id. at 23.
[21] Id. at 28 n. 11.
[22] Id. at 35 n.17 (citing Danile Anderl Judicial Security and Privacy Act, James M. National Defense Authorization Act for Fiscal year 2023, Pub. L. No. 117-263 § 5931; Cal. Gov’t Code § 7928.215(e); Del. Code Ann. Tit. 10, § 1923(b); Haw. Rev. Stat. § 92H-2; 705 Ill. Comp. Stat. 90/2-5(a); Md. Code Ann., Cts. & Jud. Proc. § 3-2303(e), Mo. Rev. Stat. § 476.1304; N.J. Rev. Stat. § 2C:20-31.1; N.Y. Judiciary Law § 859(2)(c)(i); and Okla. Stat. tit. 20 § 3016(C)).
[23] Id. at 34 n.16 (citing Va. Code. Ann. § 18.2-186.4; Colo. Rev. Stat. § 18-9-313; Md. Code. Ann., Cts. & Jud. Proc. § 3-2304; and Ky. Rev. Stat. Ann. § 525.085).
This article was originally published on August 19, 2025 on Law360 and is republished here with permission.
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.
Analogies between state and federal law are at their strongest when they have express legislative approval. For example, the Massachusetts prohibition on unfair and deceptive acts or practices (UDAP statute) directs that construction of the UDAP statute should be “guided by the interpretation given by the Federal Trade Commission and the federal courts to the federal UDAP statute.” G. L. c. 93A, Section 2. Thus, the court in Ciardi v. F. Hoffman La Roche, 762 N.E.2d 303, 309 (Mass. 2002), determined that price-fixing allegations “clearly stated a violation” of the Massachusetts UDAP statute—even though the issue had never been litigated as a matter of state law—because it was well established that price-fixing violated the federal UDAP statute. The same reasoning suggests that conduct that complies with the federal UDAP statute does not violate its Massachusetts counterpart. Although state regulators retain flexibility to take aggressive positions on questions of first impression, Massachusetts’s incorporation by reference of federal law effectively narrows the number of unresolved questions under the state UDAP statute.
Identical language in parallel statutory schemes also provides grounds for a strong analogy between state and federal law. For example, the court in Rosenberg v. JPMorgan Chase & Co. applied federal law to determine the scope of the public disclosure bar in the Massachusetts False Claims Act (FCA). This provision bars private actors from filing qui tam lawsuits on behalf of the state that mirror allegations already disclosed in “news media.” See 169 N.E.3d 445, 455 (Mass. 2021). The federal FCA also bars qui tam lawsuits that mirror allegations in “news media,” reflecting the same policy “to balance the promotion of qui tam actions while also discouraging parasitic suits.” Thus, broad interpretations of “news media” in the federal statute served as persuasive authority that “news media” in the state law includes “publicly available websites.”
Depending on the circumstances, courts may also resolve textual ambiguities in a state law by looking to a parallel federal regime even where the text of the federal statute is not identical. For example, in Story v. Wyoming State Board of Medical Examiners, 721 P.2d 1013, 1018-19 (Wyo. 1986), the court looked to cases interpreting the federal Administrative Procedure Act (APA) as persuasive in determining the extent to which private parties may rely on hearsay in agency proceedings under Wyoming’s APA. The Wyoming APA does not expressly bar hearsay but calls somewhat ambiguously for consideration of “the type of evidence commonly relied upon by reasonably prudent men in the conduct of their serious affairs.” The court observed that the federal APA is “very similar” and has been construed to allow fair use of hearsay that is “probative” and bears “satisfactory indicia of reliability,” supporting its conclusion to allow hearsay evidence that is “probative, trustworthy and credible.”
Courts employ analogies to the federal APA not only to resolve ambiguities in a state APA, but also to help fill in statutory gaps. For example, the court in Physicians for Social Responsibility v. Hogan, 2019 WL 6002122, at *6 (Md. Ct. Spec. App. Nov. 13, 2019), noted that Maryland’s APA was “silent on the authority of the governor, or an executive branch agency, to withdraw a regulation adopted by that agency by withdrawing the notice of adoption after the notice has been submitted” for publication but before publication actually occurs. The federal APA was similarly silent, but courts had interpreted it to allow a rule’s withdrawal at any time before its publication to allow agencies to correct mistakes and because a regulation is not binding before publication. Maryland’s APA was based on the Model State APA, which embodied the same “values of transparency, procedural regularity, and judicial review” as the federal APA and was similar in all relevant respects. Thus, federal precedent was persuasive support for interpreting Maryland’s APA to allow last-minute withdrawal of unpublished rules.
Businesses cannot, however, assume that courts will always look to federal law for guidance, even when interpreting statutes based on the Model State APA. Textual variations sometimes require differing interpretations of state and federal law. For example, in Arkansas Beverage Retailers Association v. Moore, 256 S.W.3d 488, 495 (Ark. 2007), the court rejected a state agency’s effort to import the federal “zone of interests” requirement for APA standing, holding it had no textual basis in the Arkansas APA. Federal authority was irrelevant, the court held, because the state legislature was “very clear” in granting standing to “any person … who considers himself or herself injured in his or her person, business, or property by final agency action.” Despite relying on federal precedent in other cases interpreting the state APA, the court declined to do so and cautioned that it had never “demonstrated any intention … to rely upon the federal APA guidelines in all instances.”
Similarly, in State ex rel. Bartlett v. Miller, 197 Cal. Rptr. 3d 673, 680 (Ct. App. 2016), the court found federal law unpersuasive in interpreting the California FCA’s bar on qui tam lawsuits based on matters publicly disclosed in a “report … conducted by or at the request of” various state and local government entities. The court acknowledged that California’s FCA was “patterned after the federal” statute and that “federal authorities interpreting the federal act are often looked to for guidance ‘to the extent the language of the two acts is similar.’” The state and federal statutes, however, employed “markedly different” language on the issue before the court, reflecting that they were “designed to protect against similar but distinct harms.” The federal statute, the court held, protects against harm to the federal fisc by encouraging private parties to come forward with information not already publicly disclosed to federal officials through federal administrative reports. The parallel state statute, by contrast, protects state and local governments and recognizes that “state officials may be unaware of information disclosed solely to or by the federal government.” Thus, California’s public disclosure bar requires a “report … conducted by or at the request of” a state or local government entity. A federal report that may trigger the federal statute’s public disclosure bar is insufficient.
As these cases illustrate, the relationship between state and federal law can be nuanced, and analogies to federal law require case-specific evaluation. For attorneys who are experienced in state regulatory practice, such analogies are already a familiar tool for resisting novel and aggressive interpretations of state law. This tool deserves renewed attention as federal deregulation spurs increased state enforcement.
Last week, TZP Management Associates, LLC (TZP), a New York-based private equity investment adviser, agreed to pay more than $680,000 in monetary relief to settle charges brought by the Securities and Exchange Commission (SEC) for breaches of fiduciary duty related to the calculation of management fees for TZP’s private fund clients. This enforcement action highlights the importance of adhering to fund partnership agreements and providing adequate disclosure of fee calculation and management practices to mitigate potential conflicts of interest.
Below is a summary of the SEC’s findings and practical takeaways for fund managers, investors, and compliance professionals.
TZP advises several private funds that invest in lower-middle market companies across technology, business services, and consumer sectors. Each fund is governed by a limited partnership agreement (LPA), which sets forth how management fees and transaction fees are to be calculated and offset. According to the SEC, between October 2018 and November 2023, TZP engaged in two fee calculation practices that the SEC found to be inconsistent with the funds’ LPAs and inadequately disclosed to investors:
- Failure to Offset Interest on Deferred Transaction Fees
- TZP entered into management services agreements with portfolio companies, which allowed for the deferral of transaction fee payments — either at TZP’s discretion or due to loan covenants at the portfolio company level.
- During the deferral period, TZP charged the portfolio companies 8% annual interest on the deferred transaction fees.
- When TZP eventually collected both the deferred transaction fees and the interest, it credited only the transaction fees (not the interest) back to the funds as offsets against management fees.
- TZP did not disclose to investors that it was collecting interest on the deferred fees or that this interest amount was excluded from the fee offsets.
- This practice resulted in the funds paying higher management fees than the SEC said that they should have paid. The SEC characterized this conduct as effectively providing TZP with interest-free loans from the funds.
- Improper Duplication of Transaction Fee Reductions
- For at least one portfolio company in which multiple TZP funds invested, TZP allocated transaction fees among the funds based on their pro rata share of invested capital, then reduced each fund’s allocation a second time based on fully diluted equity ownership.
- This double reduction was inconsistent with the LPAs and resulted in lower fee offsets and higher management fees for TZP.
- TZP did not disclose this calculation method to investors.
The SEC said the failure to offset interest on deferred transaction fees and the duplication of transaction fee reductions created a conflict of interest between TZP and investors that was not disclosed. The SEC said TZP breached its fiduciary duty to the funds by engaging in this conduct.
Impact and Settlement
As a result of these practices, TZP overcharged its funds by more than $500,000 in excess management fees. The SEC found that these actions violated Section 206(2) of the Investment Advisers Act of 1940, which prohibits fraudulent, deceptive, or manipulative practices by investment advisers.
To settle the charges, without admitting or denying the SEC’s allegations, TZP agreed to a cease-and-desist order and censure, and paid $502,041 in disgorgement, $6,836 in prejudgment interest, and a $175,000 civil penalty.
Key Takeaways and Lessons Learned
The TZP enforcement action serves as a reminder that fee transparency, conflict management, and strict adherence to fund documents are essential for private fund advisers. Firms should proactively review their practices, update disclosures, and ensure robust compliance programs to avoid similar pitfalls. Specifically, investment advisers should be mindful of the following:
- Strict Adherence to Fund Governing Documents: Fund managers must ensure that all fee calculations and offsets strictly follow the terms set forth in LPAs and other governing documents. Any deviation, even if inadvertent, can result in regulatory scrutiny and enforcement action, or private breach of contract claims.
- Comprehensive Disclosure of Fee Practices: All sources of compensation, including interest on deferred fees or other ancillary payments, must be fully disclosed to investors. Failure to do so can create undisclosed conflicts of interest and violate fiduciary duties.
- Conflict of Interest Management: Practices that benefit the adviser at the expense of the fund — such as discretionary deferral of fees or exclusion of interest from offsets — must be clearly disclosed and, where possible, mitigated. Transparency is critical to maintaining investor trust and regulatory compliance.
- Robust Internal Controls and Compliance Oversight: Investment advisers should regularly review their fee calculation methodologies and disclosures to ensure consistency with fund documents and regulatory requirements. Periodic audits and compliance training can help identify and address potential issues before they escalate.
- Investor Communication and Remediation: In the event of a fee miscalculation or other error, prompt communication with investors and remediation — including repayment and improved disclosures — can help mitigate regulatory and reputational risk.
If you have questions about fee calculations, fund governance, or SEC compliance, please contact Troutman Pepper Locke’s Securities team for guidance.
Businesses invest an immense amount of time, effort, and financial resources into building their brand identity and overall cultivating a strong foundation of consumer trust. This trust is not only a cornerstone of a brand’s reputation but is also a critical component of its long-term success in the marketplace. However, with the rise of phishing attacks, a brand’s trust can be quickly weaponized against unsuspecting customers when bad actors create fraudulent websites or send phishing emails impersonating an authentic business. These deceptive tactics often involve using the company’s trademark, trade dress, and copyrighted images to appear legitimate, tricking unsuspecting customers into divulging their personal and sensitive information.
Your Brand Is on the Line
The Federal Trade Commission (FTC) recently unveiled its August Data Spotlight, highlighting a concerning trend: reports of impersonation scams resulting in significant financial losses have quadrupled since 2020.[1] Specifically, the number of reports increased from roughly 1,800 in 2020 to exceeding 8,000 in 2024.[2] This increase underscores the growing threat of impersonation to consumers themselves.
Approximately 28% of impersonation scams[3] originate from interactions through online platforms and email communications, where impersonators can craft fraudulent emails or websites that mimic the appearance and functionality of legitimate businesses. And while the FTC’s report focuses on the ramifications of impersonation for consumers and outlines measures that individuals can adopt to protect themselves, it leaves open the question of what companies can do when targeted by these bad actors. One significant challenge with impersonators is their anonymity. The privacy mechanisms embedded in the domain registration process allow registrants to conceal their identities, making it difficult to determine who is responsible for the impersonation. This obfuscation poses a barrier to pursuing legal action, since starting formal litigation requires knowing the party to be sued.
Reeling Back in Your Reputation
Nonetheless, businesses have an effective tool to combat brand impersonation — their intellectual property.
I. Uniform Domain-Name Dispute-Resolution Policy
The Uniform Domain-Name Dispute-Resolution Policy (UDRP) provides a structured mechanism for trademark owners to challenge domains that mirror or closely resemble their trademarks. To successfully employ UDRP as an enforcement tool, the trademark owner must demonstrate three key elements:
- An identical or confusingly similar domain name;
- A lack of legitimate interest in the domain name; and
- Bad faith registration and use.
While the UDRP process involves drafting a complaint and paying a filing fee, it remains less formal, quicker, and cheaper compared to federal trademark litigation. Given the nature of impersonators, they often do not respond to UDRP proceedings, streamlining the process for rightful trademark holders to reclaim rights in the infringing domain.
II. Digital Millennium Copyright Act
In situations where a fraudulent entity isn’t explicitly using your trademark but has essentially duplicated a website under a different domain name, businesses may have recourse under the Digital Millennium Copyright Act (DMCA). If images or content from the authentic website are mirrored on an impersonating site, the DMCA makes it considerably easier for website owners to issue takedown requests to service providers, website operators, search engines, or registrars (discussed more below). These providers are often reluctant to wade into arguably questionable trademark disputes but will act swiftly to remove infringing copyrights. Additionally, utilizing tools like Google image search can be an effective strategy to identify infringing uses. Overall, relying on copyright will help ensure the removal of impersonating websites without the need for intricate comparisons between trademarks or commercial offerings.
III. Takedown Request to Domain Registrar for Repeat Impersonations
Submitting takedown requests to the registrar of the impersonating domain can be a cost-effective and fast option when you are dealing with repeat impersonations. This option generally involves reporting the infringing site directly to the registrar. This process has varying timelines and procedures depending on the registrar involved. Some registrars have established formal forms and guidelines for takedown requests, while others might just require an email to their legal team.
Regardless of the registrar’s specific process, the most successful takedown requests typically include clear evidence of rights in its intellectual property and documentation of the malicious intent or bad faith use of the domain, such as examples of the phishing or impersonation activity.
When submitting takedown requests, it’s important to remember that the individuals reviewing these requests are typically knowledgeable and aware of intellectual property issues. If your demands are excessive or unreasonable, or if your client’s rights are unclear, it could negatively affect the perception of your client or brand. Registrars often opt to suspend domains rather than transfer them in response to takedown requests, so it’s crucial to be mindful of specific registrar policies regarding the re-release of suspended domains, as it may affect your takedown strategy.
The best results often come from combining UDRP or DMCA with takedown requests. Successful UDRP decisions or DMCA requests lend credibility to subsequent takedown requests, prompting registrars to take reports of abuse more seriously. This integrated approach strengthens the defense against repeat impersonation and domain abuse.
Casting a Wide Net of Protections
For both UDRP and takedown requests, having a registered trademark, whether with the U.S. Patent and Trademark Office or in foreign countries, streamlines UDRP proceedings because trademark registration creates a legal presumption that the mark is valid, that you own the trademark, and have the right to use the mark. A registration provides a solid legal basis for enforcers to quickly act upon infringement and impersonation claims.
Moreover, when encountering repeated impersonation, additional strategies can bolster your defenses. Domain watch services and real-time notifications are invaluable tools that monitor domain activity, alerting you to new registrations that mimic or infringe upon your trademark. Defensive domain registration is another effective measure. By preemptively buying domains that closely resemble your brand, you can deny impersonators the opportunity to exploit them.
Overall, safeguarding brand identity in the digital landscape demands a strategic blend of proactive and defensive actions. Using a trademark and copyright as the legal foundation, businesses are likely to have success with both the UDRP or DMCA and takedown requests to fight impersonation. These actions not only mitigate risk for consumers, but also prevent impersonators from causing lasting reputational harm — especially when they already have a hook in your brand.
[1] https://www.ftc.gov/news-events/news/press-releases/2025/08/ftc-data-show-more-four-fold-increase-reports-impersonation-scammers-stealing-tens-even-hundreds.
[2] https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2025/08/false-alarm-real-scam-how-scammers-are-stealing-older-adults-life-savings#ftn3 at n.3.
[3] Id. at n.2.
On August 6, the Committee on Foreign Investment in the U.S. (CFIUS) released the unclassified version of its Annual Report to Congress for Calendar Year (CY) 2024 (Report), depicting trends in the number of filings through CY 2024, distribution of foreign acquirer home countries, and updates on compliance and enforcement activity.
Key Findings of the Report
CFIUS is required to publish an annual report under Section 721(m) of the Defense Production Act, 50 U.S.C. § 4565(m). The Report must include, among other information, statistical data and specific transaction information related to critical technologies, offering rare public insight into CFIUS’s otherwise confidential process. Key findings in the Report include:
- The number of filings for CY 2024 remained steady compared to CY 2023, despite the uncertainty that stems from an election year;
- Electric Power Generation, Transmission, and Distribution industry had the most declaration filings in CY 2024, signaling an interest in foreign investment within this sector;
- Most foreign investor notice filings originated from China for CY 2024 and cumulatively from 2022 to 2024. Meanwhile, Japanese investors were the leading source of declaration filings in 2024; and
- CFIUS prioritized compliance and enforcement by focusing on non-notified transaction reviews and conducting 79 site visits of entities under mitigation agreements.
Declaration and Notice Filings Remained Steady
Parties may file either a declaration or a notice. Declarations are shorter with no associated cost, but CFIUS may require parties to file a notice after reviewing a declaration. In CY 2024, declaration filings increased slightly from 109 to 116 compared to CY 2023, with only 17 subsequently filed as notices. Of the 116 declarations filed, six were real estate filings, and 36 were mandatory filings. CFIUS must complete its initial review within 45 days, with an additional 45-day investigation window if CFIUS determines that it needs additional time to assess the transaction. Notice filings decreased from 233 filed in CY 2023 to 209 in CY 2024; 116 of these filings resulted in an investigation.
Despite the uncertainty associated with election years, CY 2024’s filing numbers remained steady, indicating continued foreign investment interest in the U.S. Next year’s data will be particularly telling in light of the administration’s America First Investment Policy Memorandum, which was released on February 21.
Filings From Leading Industry Sectors
The sectors with the most declaration filings in CY 2024 were Electric Power Generation, Transmission and Distribution (10 filings), Architecture, Engineering, and Related Services (10 filings); and Computer Systems Design and Related Services (nine filings). Computer Systems Design and Related Services led notice filings with 26 in CY 2024. Electric Power Generation, Transmission and Distribution continued to be a leading sector for notice filings from 2022 through 2024, second only to Scientific Research and Development Services, which had 61 cumulative filings.
Foreign Acquirer Country Distribution
Japanese investors accounted for the most declarations in CY 2024 (16), followed by Canada (11), and UK and France (nine each). From 2022 to 2024, Canada led with 46 declaration filings.
Chinese investors filed the most notices in CY 2024 (26) and had the highest cumulative number of notices from 2022 to 2024. France and Japan followed with 23 filings each and United Arab Emirates had 21. The largest number of critical technology transactions involved acquirers from Japan, France, and China.
Enforcement and Compliance Increased
CFIUS can impose mitigation measures to address national security concerns arising from the transaction at any stage, including during initial review of the transaction or as part of a presidential order to prohibit a transaction.
In CY 2024, CFIUS adopted mitigation measures or conditions for 25 notices: 16 after finalized reviews; seven resulting from decisions to withdraw and/or abandon the transaction; one interim mitigation measure during CFIUS review; and one presidential order to divest a certain real estate transaction. CFIUS conducted 79 site visits that “involved compliance-focused interviews with senior executives and line-level personnel, inspection of records and systems, and verification of physical and logical access controls.”
CFIUS’s focus on non-notified transactions increased significantly in CY 2024. The Committee identified and “preliminarily considered thousands of potential non-notified transactions,” ultimately investigating 98 for potential formal inquiries, with 76 resulting in formal requests and 12 in filings. Notably, a presidential order prohibiting a real estate transaction for MineOne began as a non-notified action. And just last month, President Trump signed a presidential order requiring the divestment of a transaction involving Jupiter Systems, which was also suspected to have been initiated as a non-notified action. CFIUS’s proactive approach to investigating non-notified transactions underscores the importance of thorough risk analysis for entities considering foreign investment.
Looking Forward
The Report suggests that CFIUS reviews will remain robust and resource-intensive, especially as regulatory authorities expand (e.g., new rules on real estate and enhanced enforcement powers enacted in November 2024). From 2015 to 2024, CFIUS reviewed 2,199 notices, with 55% resulting in investigations, and reviewed 783 declarations from 2018 to 2024. The high rate of investigations and mitigation agreements reflects rigorous scrutiny of foreign investments, particularly in sensitive sectors.
CFIUS’s proactive identification of non-notified transactions and strengthened enforcement, combined with increased staffing and updated regulations, positions the Committee to address evolving national security risks. The Report notes ongoing threats of espionage targeting critical technology from China, Russia, Iran, and North Korea, as well as cyber espionage from countries with close U.S. ties. These concerns reinforce CFIUS’s and the U.S. government’s focus on national security efforts in the economic sector.
As foreign investment patterns shift and more sectors become central to U.S. security interests, companies should expect CFIUS reviews to become more frequent, comprehensive, and complex in the coming years.
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.
Read the full article in Reuters Legal and Westlaw Today.
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State Attorneys General Monitor analyzes regulatory actions by state AGs and other state administrative agencies throughout the nation. Contributors to this newsletter and related blog include attorneys experienced in regulatory enforcement, litigation, and compliance. Also visit our State Attorneys General Monitor microsite.
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Troutman Pepper Locke Spotlight
Understanding BBB Ratings: Strategic Approaches to Consumer Complaints
By Stephen C. Piepgrass, Michael Yaghi, and Daniel Waltz
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.
New AG on the Block
Catherine Hanaway Appointed as Missouri AG
By Troutman Pepper Locke State Attorneys General Team
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).
Multistate State AG News
Understanding the Impact of HCA Healthcare’s Settlement
By Troutman Pepper Locke State Attorneys General Team and Jessica Birdsong
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.
Single State AG News
Arizona AG and BBB Launch Educational Campaign on Modern Consumer Scams
By Troutman Pepper Locke State Attorneys General Team and Nick Gouverneur
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.
AG of the Week
Drew Wrigley, North Dakota
Drew Wrigley was appointed as North Dakota’s 30th AG in February 2022 by Governor Doug Burgum, following the passing of AG Wayne Stenehjem. A fourth-generation North Dakotan, Wrigley has deep family roots in Walsh County and Burke County, where the Wrigley Brothers Farm continues to operate. He graduated with honors in Economics and Philosophy from the University of North Dakota and earned his law degree from the American University, Washington College of Law.
Wrigley began his legal career as an assistant district attorney in Philadelphia before returning to North Dakota in 1998. In 2001, he was nominated and confirmed as North Dakota’s 17th U.S. attorney. After stepping down in 2009, he served as vice-president for a national Medicare and Medicaid contractor in Fargo and later as North Dakota’s 37th lieutenant governor from 2010 to 2016. He then transitioned to the private sector, advising a regional health care, insurance, research, and philanthropic organization.
In 2019, Wrigley was again nominated and confirmed as North Dakota’s 19th U.S. attorney, becoming the first North Dakotan to hold the position twice. He returned to the private sector in 2021, serving as general counsel for his family’s contracting companies.
North Dakota AG in the News:
- Wrigley announced a new concealed weapon license (CWL) validation tool designed to streamline the verification process of a purchaser’s CWL.
- Wrigley shared information on how the North Dakota Lottery funds the Multijurisdictional Drug Task Force Grant Fund, supporting the operational needs of 11 drug task forces across the state.
Upcoming AG Events
- August: AGA | Chair’s Initiative | Alaska
- September: RAGA | Fall National Meeting | Miami, FL
- September: DAGA | Denver Policy Conference | Denver, CO
For more on upcoming AG Events, click here.
Troutman Pepper Locke’s State Attorneys General team combines legal acumen and government experience to develop comprehensive, thoughtful strategies for clients. Our attorneys handle individual and multistate AG investigations, proactive counseling and litigation, and manage ancillary regulatory issues. Our successful approach has been recognized by Chambers USA, which ranked our practice as a leader in the industry.
Yesterday, President Trump signed into law the Export Control Transparency Act. While this new law includes a confidentiality provision, organizations submitting export license applications to the Commerce Department’s Bureau of Industry and Security (BIS) should, in some cases, be concerned about the implications.
For certain types of license requests, the name of the applicant, end user, type of product/technology, value, and other details will be reported to Congress. In many cases, this information is quite sensitive. For example, suppliers may not be aware that their products are being exported to restricted end users, and may object to this (even if fully lawful), jeopardizing supply chains. Banks and other partners may increase scrutiny. Valuations on export license applications can be misleading and may give rise to hard questions. Of course, outside attention to business with restricted parties is typically not desirable, and companies probably won’t be able to provide the proper context to explain the information being reported.
Therefore, a major looming question for organizations within this law’s scope is the likelihood that members of Congress or their staff may publicly disclose the information that is reported to them or otherwise use it in unintended ways. Many organizations will not be comfortable with this risk and will look for alternative strategies. Some may reconsider opportunities to remove their exports from BIS’s licensing jurisdiction. As a result, this law may further discourage U.S. exports and add another incentive for offshoring, reducing U.S. sourcing, etc.
However, the narrow scope of the law is helpful. It only covers applications for export, transfer, etc. “to covered entities,” which must be both: 1) located in a U.S. arms-embargoed country (e.g., China), and 2) on the BIS Military End-User List or Entity List. With this in mind, only a tiny proportion of applications to BIS must be reported to Congress under this law.
If you have any questions about these developments, please contact a member of our Sanctions + Trade Controls team.