Articles + Publications - Troutman Pepper Locke

On June 30, 2025, President Trump issued an executive order (EO) that, effective July 1, revokes the U.S. sanctions program on Syria, and calls for the removal of the Syrian Sanctions Regulations from the Code of Federal Regulations (31 C.F.R. Part 542). This builds on the significant sanctions relief that we described in detail in our May 29 client alert.

As of July 1, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has confirmed that “[a]ll Syrian financial institutions have been removed” from the Specially Designated Nationals (SDN) list. OFAC stated that it removed 518 SDNs that had been designated under the Syria sanctions program, in conjunction with the State Department’s removal of sanctions on certain individuals and entities.

However, elements of U.S. sanctions on Syria remain in place, in particular stringent export controls. The EO waives certain statutory requirements to impose broad export controls on Syria, although this waiver has not yet been implemented by the U.S. Commerce Department’s Bureau of Industry and Security (BIS).

The EO directs the Secretary of State to review the designation of Hay’at Tahrir al-Sham (HTS) as a Foreign Terrorist Organization (FTO), along with the designations of HTS and Ahmed al-Sharaa as Specially Designated Global Terrorists (SDGT), and Syria’s designation as a State Sponsor of Terrorism. The Secretary of State has also stated that he “will examine the potential full suspension of the Caesar Act,” building on the waiver already in place, as described in our May 29 alert.

OFAC confirmed that Syria General License (GL 25), detailed in our May 29 alert, can still be used and remains relevant for dealings with parties that are sanctioned under other programs, such as Syrian government authorities that may be associated with HTS or other FTOs.

OFAC has replaced the Syria sanctions program with the Promoting Accountability for Assad and Regional Stabilization Sanctions (PAARSS) program. Under this new authority, OFAC has expanded its sanctions “on Bashar al-Assad and his associates, human rights abusers, captagon traffickers, persons linked to Syria’s past proliferation activities, ISIS and Al-Qa’ida affiliates, and Iran and its proxies.” OFAC designated over 130 individuals and entities for these reasons.

OFAC did warn that that “[p]ending or future OFAC investigations or enforcement actions related to apparent violations of the Syrian Sanctions Regulations that occurred prior to July 1, 2025, may still be carried out.” This is a typical policy when OFAC terminates a sanctions program, clarifying that previous violations can still be penalized and ongoing cases will not necessarily be impacted.

Conclusion

As the U.S. and partner governments continue taking actions to relax sanctions on Syria, some risks remain. Due diligence and screening remain important, along with export controls compliance. Stakeholders should continue to monitor developments closely, as this sanctions relief could be reversed if the Syrian government is not viewed as upholding the sweeping commitments it has made.

Nick Erickson, a 2025 summer associate with Troutman Pepper Locke who is not admitted to practice law in any jurisdiction, also contributed to this article.

Shortly before the scheduled start of the trial, the U.S. Department of Justice, Antitrust Division (Division) reached a settlement with Hewlett Packard Enterprise (HPE) and Juniper Networks (Juniper), allowing their $14 billion merger to proceed. The settlement, described by the agency as “novel,” requires divestiture of an HPE business line to a pre-approved buyer and at least one license of certain Juniper technology to one or more licensees that must be approved by the Division.

For the third time in a month, the new administration has approved a structural remedy to address the potential anticompetitive effects of a merger.

The Transaction

HPE offers products in several technology markets, including general-purpose servers, cloud storage, and finance. The company also sells networking products, including wireless access points and campus switches, under the HPE Aruba Networking brand and its legacy on-premises network management solution, Airwave. Juniper provides a range of networking products, including wireless access points, wired switches, and network management software under the Mist brand.

Post-merger, HPE and Juniper’s aggregate market share would be only approximately 22-26%, below the 2023 Merger Guidelines’ 30% market share illegality presumption. However, the Division also alleged that the parties’ largest competitor has an approximate 48% market share and that at least seven other competitors each have market shares of only between 1% and 10% for commercial or enterprise-grade wireless networking solutions. The transaction would result in two firms controlling more than 70% of the relevant market, with a significant gap between post-closing HPE and the next largest competitor in the market, allegedly making it easier for the two largest companies to reach and sustain a consensus on price, features, and reliability.

Despite the transaction being cleared by 14 foreign antitrust authorities, the Division sued to block the merger in January 2025 over concerns about competition for local wireless networking technology. According to the agency’s complaint, there were three primary theories of harm: (1) loss of head-to-head competition between the merging parties’ Aruba and Mist brands, causing prices to increase; (2) elimination of a disruptive force in the industry that has introduced tools to significantly lower the cost of wireless networks; (3) increased risk of coordination among the remaining vendors.

The European Commission’s public findings regarding the transaction’s impact in the EEA are in stark contrast with the Division’s allegations. HPE’s CEO’s recent statements might, however, explain the divergence; he has said that the transaction would facilitate the firm’s ability to better compete outside the U.S., where more competitors with higher market shares participate in the market.

The Remedies

The divestiture and technology license(s) are intended to eliminate the alleged anticompetitive effects of the acquisition by strengthening one or more existing competitors or facilitating entry of a new competitor for enterprise-grade WLAN solutions.

HPE must divest its global “Instant On” campus and branch WLAN business, including all assets, intellectual property, R&D personnel, and customer relationships within 180 days.
The parties must also hold an auction for a perpetual, worldwide, non-exclusive license to Juniper’s AI Ops for Mist source code. The license will include optional transitional support “on reasonable commercial terms” and personnel transfers.

The settlement also assures that any winning licensee will have the right to any improvements to and derivatives of the licensed technology and the right to grant rights of use to the technology to its end users and service providers as reasonably needed. If the auction results in multiple bids exceeding $8 million, Juniper will be required to license to at least one additional bidder. This novel approach by the Justice Department reflects a commitment to solving unique challenges in mergers.

While not routine, license remedies have been used previously. For example, in 2017, the Federal Trade Commission (FTC) accepted a license remedy for its challenge to a pharmaceutical company’s acquisition of the U.S. rights to the drug Synacthen. The FTC alleged there that the acquisition would prevent the development of a U.S. competitor to the buyer’s monopoly. In another instance, a licensing remedy was approved in a post-consummation merger challenge.

A licensing remedy alone, however, would likely have been insufficient. The divestiture of a business is an important component to the settlement here. Accordingly, parties considering transactions should not assume that a license alone will resolve agency concerns. On the other hand, it is also clear that the current administration is willing to resolve merger challenges in advance of trial in this case and in advance of complaint in two other recent transactions. This apparent shift in approach should be taken into consideration when assessing the substantive risk of potential transactions, designing agency clearance strategies, and negotiating antitrust risk-shifting provisions in purchase agreements.

Our team published new content and podcasts to the Consumer Financial Services Law Monitor throughout the month of June. To catch up on posts and podcasts you may have missed, click on the links below:

On June 30, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) held the first of three listening sessions focused on ways to lower Americans’ drug prices through competition. The panels are being held as part of the agencies’ implementation of President Donald Trump’s Executive Order No. 14273, titled “Lowering Drug Prices by Once Again Putting Americans First.” That order instructed the Department of Health and Human Services (HHS) secretary to conduct “joint public listening sessions with the [… DOJ], the Department of Commerce and the [FTC] and issue a report with recommendations to reduce anti-competitive behavior from pharmaceutical manufacturers.”

In this first panel discussion, titled “Anticompetitive Conduct by Pharmaceutical Companies Impeding Generic or Biosimilar Competition,” FTC Chairman Andrew Ferguson highlighted both that the new administration seeks to revisit previous policies and that the executive order’s mandate was wide-ranging.

As discussed below, the 10 panelists focused on antitrust, patent trade office (PTO) reform, and legislative and regulatory action. Panelists also repeatedly referenced the role of pharmacy benefit managers (PBMs) in drug pricing. A more detailed discussion on that topic is scheduled for the second listening session on July 24.

Role of Antitrust

Panelists briefly addressed the role of antitrust — which, unlike PTO and legislative reform — is squarely in the enforcement purview of the FTC and DOJ. Some panelists focused on reverse payment agreements and product hopping as continuing barriers to competition. For example, Markus Meier, who investigated pharmaceutical and health care related antitrust issues with the FTC before retiring in 2023, advocated for further FTC study or investigations into current patent settlement practices.

Other panelists discussed the need for rigorous merger review and litigation challenging collusion, exclusive API supply agreements, and restricted distribution practices.

PTO Reform

Panelists debated the role of patent practices in driving high drug prices, with some arguing that excessive patenting stifles generic competition, and others defending the necessity of successor patents for innovation. The former group argued that successor patents provide incremental changes with little clinical benefit, that patent thickets delay generic entry, and that the PTO should be allowed to more rigorously examine patent applicants, granting only patents that are truly novel and non-obvious. The latter noted that pharmaceutical companies are not obtaining materially more patents than other industries.

Legislative and Regulatory Action

Panelists proposed legislative reforms to streamline biosimilar approvals, particularly by eliminating the FDA’s interchangeability suffix to boost competition. Interchangeability is a label the FDA gives to biosimilars that allows pharmacists to substitute those biosimilars for the reference biologic without the prescriber’s intervention. Some panelists argued that obtaining this additional designation is burdensome and unnecessary, and that the designation creates unnecessary barriers to entry. They suggested that legislative reform to the BPCIA removing this designation would encourage increased production of biosimilars. Similarly, one panelist proposed elimination of the requirement for three-way pharmacokinetics study in cases where a European-sourced reference product is used. Another advocated for a clear and narrow definition of “specialty” that would lead to less steering and greater availability of drugs and biologics that do not meet the definition.

Other panelists also noted that unnecessary regulation has also imposed barriers to biosimilar adoption, and reminded that the FTC sought public comment on ways to reduce anti-competitive regulatory barriers. Those comments can be viewed here.

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Subsequent panels are scheduled for July 24 and August 4.

Devin Sengpiel, a 2025 summer associate with Troutman Pepper Locke who is not admitted to practice law in any jurisdiction, also contributed to this article.

Regulatory Oversight Blog

Make sure to visit Troutman Pepper Locke’ 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

American Bar Association’s State and Local Government Law Section Webinar Series: State Attorneys General Enforcement Actions and Litigation: The Unwritten Rules

By Ashley L. Taylor, Jr.

Join Troutman Pepper Locke attorney Ashley Taylor, the co-leader of the firm’s State Attorneys General team, as he participates in part two of the American Bar Association’s State and Local Government Law Section webinar series titled “State Attorneys General Enforcement Actions and Litigation: The Unwritten Rules.” This session will focus on the “Multistate Investigations and Settlements” chapter from the recently published book, Consumer Protection: Understanding Enforcement Actions Brought by State Attorneys General. The webinar aims to delve into the complexities and nuances of enforcement actions initiated by consumer protection staff within state attorneys general offices.

State Privacy Law Evolution: New Legislative and Regulatory Enforcement Approaches

By David Navetta, Gene Fishel, and Daniel Waltz

Register Here
Wednesday, July 23 • 12:00 – 2:10 p.m. ET

Troutman Pepper Locke attorneys Dave Navetta, Gene Fishel, and Dan Waltz will participate in an upcoming CLE with myLawCLE discussing the evolving landscape of data privacy regulation across the United States. This panel discussion will offer an in-depth analysis of state-level data privacy laws, with a focus on pioneering regulations such as California’s Consumer Privacy Act and Virginia’s Consumer Data Protection Act, along with other notable state-specific legislative measures. Our panelists will explore the complexities of these laws, emphasizing key differences and similarities that affect both businesses and consumers.

Solicitors General Insights: The Legal Frontlines in Iowa and Indiana

By Stephen C. Piepgrass and Jeff Johnson

In this episode of our special Regulatory Oversight: Solicitors General Insights series, Jeff Johnson is joined by Iowa Solicitor General Eric Wessan and Indiana Solicitor General James Barta to discuss their roles and responsibilities, as well as the current legal challenges their offices are facing. The conversation delves into the intricacies of state and federal court appeals, highlighting the significant amount of work done in state courts.

Facial Recognition and Legal Boundaries: The Clearview AI Case Study

By Stephen C. Piepgrass, David Navetta, Lauren Geiser, and Daniel Waltz

In this episode of the Regulatory Oversight podcast, Stephen Piepgrass welcomes David Navetta, Lauren Geiser, and Dan Waltz to discuss the $51.75 million nationwide class settlement involving Clearview AI and its broader implications. The conversation focuses on Clearview AI’s facial recognition software, which has sparked controversy due to its use of publicly available images to generate biometric data.

Virginia Democratic Attorney General Primary: A Narrow Victory for Jay Jones

By Troutman Pepper Locke State Attorneys General Team

In a closely contested Democratic primary held on Tuesday, June 17, Virginia state delegate Jay Jones narrowly defeated Henrico County Commonwealth’s Attorney Shannon Taylor in the race for attorney general. This outcome sets the stage for a November election against Republican incumbent Jason Miyares, who advanced unopposed from his primary.

New AG on the Block: Wyoming Interim Attorney General Ryan Schelhaas

By Troutman Pepper Locke State Attorneys General Team

On May 27, Wyoming Governor Mark Gordon announced the appointment of Ryan Schelhaas as interim attorney general (AG). Schelhaas succeeds AG Bridget Hill, who will join the Wyoming Supreme Court as its newest justice. Governor Mark Gordon has indicated he plans to nominate Schelhaas as the permanent replacement, enabling him to serve the remainder of the term as the state’s attorney general.

Texas Legislature Passes Comprehensive AI Governance Act

By Stephen C. Piepgrass, Gene Fishel, Laura Hamady, and Daniel Waltz

On June 2, the Texas legislature passed the Texas Responsible Artificial Intelligence Governance Act, (TX AI Act or bill) which heads to the governor for his signature or veto. The bill will take effect January 1, 2026, if the governor signs it into law. It is the most comprehensive piece of AI governance legislation to pass a state legislature to date. If enacted, Texas will become the fourth state after Colorado, Utah, and California to pass AI-specific legislation.

Streaming Under Scrutiny: Michigan AG Alleges Roku Violates COPPA and Other Privacy Laws

By Troutman Pepper Locke State Attorneys General Team, Gene Fishel, Laura Hamady, Esther Kye, and Kyara Rivera Rivera

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 that Roku collects and monetizes personal data from children without proper parental consent in violation of the Children’s Online Privacy Protection Act (COPPA) and other laws, including the Video Privacy Protection Act (VPPA) and the Michigan Consumer Protection Act.

Texas AG Spurs National Reform for General Mills

By Troutman Pepper Locke State Attorneys General Team and Warren F. “Jay” Myers

Texas Attorney General (AG) Ken Paxton announced that General Mills has agreed to remove petroleum-based artificial dyes from its cereals and school food products throughout the U.S. by summer 2026, and from its entire U.S. product line by the end of 2027. The decision follows an investigation launched by Paxton’s office into General Mills, and his office has announced that they are investigating other food companies for similar alleged misconduct.

Court of Appeals Blocks Texas AG From Enforcing Pre-Litigation Subpoena

By Troutman Pepper Locke State Attorneys General Team and Leah DeFazio

The U.S. Court of Appeals for the District of Columbia recently enjoined Texas Attorney General (AG) Ken Paxton from enforcing a pre-litigation subpoena issued to Media Matters for America (Media Matters). The subpoena is related to the Texas AG’s investigation into Media Matters arising out of allegations that the company fraudulently manipulated data after it reported about brand advertisement concerns on X.

FTC and Nevada AG Accuse ILM of Deceptive Advertising

By Troutman Pepper Locke State Attorneys General Team and Natalia Jacobo

Nevada Attorney General (AG) Aaron D. Ford recently announced that the State of Nevada and the Federal Trade Commission (FTC) have filed a suit against IYOVIA. IYOVIA currently operates under the brand names IM Mastery Academy, iMarketsLive, and IM Academy (collectively, “IML”) and is accused of falsely promising significant income through trading in various financial markets and through a multi-level marketing scheme.

NY AG Reaches $3.2M in Settlements With 8 New York Nissan Dealerships

By Troutman Pepper Locke State Attorneys General Team and Michael Lafleur

New York Attorney General (AG) Letitia James’ office has reached a cumulative total of $3.2 million in settlements with eight Nissan dealerships that the office accuses of overcharging New Yorkers for purchasing leased vehicles at the conclusion of their lease term.

Indiana and Maryland Become Latest States to Enact Earned Wage Access Legislation

By Troutman Pepper Locke State Attorneys General Team and Lane Page

Indiana and Maryland became the most recent states to enact legislation regulating earned wage access (EWA) services, with Indiana passing House Enrolled Act 1125 on May 6, and Maryland passing House Bill 1294 on May 20.

Maryland Ramps Up Fair Housing Enforcement

By Troutman Pepper Locke State Attorneys General Team and Kyara Rivera Rivera

Maryland Attorney General (AG) Anthony G. Brown recently announced three settlements with real estate and property management companies, resulting in more than $310,000 in combined civil penalties and restitution. Brown alleged that the property management and real estate companies discriminated against various tenants that utilized housing vouchers or had criminal records, in violation of federal and state fair housing laws.

California AG Takes Action Against $1.3 Million Insurance Fraud Scheme

By Troutman Pepper Locke State Attorneys General Team and Lauren Hancock Miller

In May, California’s attorney general (AG) charged a local dermatologist with more than 20 counts of fraud after uncovering a scheme that allegedly resulted in the state’s Medicaid program paying out over $1.3 million for services that were never rendered.

New Mississippi Cigarette and ENDS Directory Laws Take Effect in July

By Bryan Haynes, Agustin Rodriguez, and Michael Jordan

Effective July 1, Mississippi will require all cigarette and ENDS manufacturers to provide annual certifications and have their products listed on a state directory in order for their products to be sold in the state. The law, enacted through HB 916, creates separate directories for cigarettes, including roll-your-own (RYO) tobacco, and Electronic Nicotine Delivery Systems (ENDS) products, such as e-cigarettes and vapes.

Texas Senate Bill 3: A Sweeping Ban on Intoxicating Hemp-Derived Products — Implications for the Industry

By Jean Smith-Gonnell and Cole White

On May 27, the Texas Legislature sent Senate Bill 3 (SB3) to Gov. Greg Abbott for signature, marking a potentially seismic shift in the legal landscape for hemp-derived cannabinoid products in the state. If signed into law – or allowed to take effect without a veto – SB3 will impose one of the most comprehensive bans on consumable hemp products in the country, to include all products containing any measurable amount of tetrahydrocannabinol (THC) or other natural and synthetic intoxicating cannabinoids. The legislation targets a market that has flourished since the passage of the 2018 federal Farm Bill and Texas’s 2019 hemp law, creating new compliance, enforcement, and business continuity questions for stakeholders across the supply chain. This article summarizes SB3’s major provisions and provides an example of the impacts the bill will have on manufacturers, retailers, and consumers through the lens of infused beverage products.

Recent SEC AML Enforcement Actions’ Impact on Compliance Efforts in the Cannabis Sector

By Jay A. Dubow and Jessica McClellan

Investing in the cannabis industry is not without its risks, given the evolving regulatory landscape and the varying state and federal statuses of the product itself. The Financial Crimes Enforcement Network (FinCEN) has shown it will continue to enforce its 2014 Marijuana Bank Secrecy Act (BSA) Guidance, despite the rescission of the Cole Memo in 2018, which initially informed this guidance. Additionally, for public companies and other entities subject to oversight by the Securities and Exchange Commission (SEC), recent SEC enforcement cases reinforce the necessity of rigorous due diligence and adherence to anti-money laundering (AML) protocols, especially given that FinCEN maintains that all financial transactions involving marijuana remain federally illegal.

Colorado Cracks Down on Hemp Misrepresentation

By Jean Smith-Gonnell and McKayla Riter

On May 14, Colorado Attorney General (AG) Phil Weiser announced that the state reached a settlement with MC Global Holdings, LLC, its associated companies, and owners (collectively MC) to resolve allegations that MC’s business practices violated the Colorado Consumer Protection Act (CCPA).

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.

On June 20, the U.S. Supreme Court issued its opinion in McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., 606 U.S. —- — S.Ct. —- 2025 WL 1716136 (2025), addressing whether, under the Administrative Orders Review Act (Hobbs Act), 28 U.S.C. §2342, district courts are bound by the Federal Communication Commission’s (FCC) interpretation of the Telephone Consumer Protection Act (TCPA). The Fourth, Sixth, Seventh, Eighth, Ninth, Eleventh, and District of Columbia Circuits had held that because the Hobbs Act vests exclusive jurisdiction to determine the validity of FCC orders in the circuit (appellate) courts, district courts were bound by the FCC’s orders interpreting the TCPA.

In a 6-3 vote, the Supreme Court rejected these decisions, holding that district courts are not bound by the FCC’s interpretation of the TCPA. District courts are empowered to independently interpret the TCPA under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation. This decision has important implications for businesses engaged in any outbound telephone communications where the TCPA applies.

Case Background:

Over 10 years ago, McKesson Corporation sent unsolicited fax advertisements through a subsidiary to medical practices, including McLaughlin Chiropractic Associates. McLaughlin filed a class action complaint in 2013, seeking damages and an injunction from McKesson, alleging TCPA violations for failing to include the required opt-out notices. McLaughlin sought to represent a class of fax recipients who received the advertisements either on traditional fax machines or through online fax services.

While McLaughlin’s lawsuit was pending, the FCC issued a declaratory ruling interpreting “telephone facsimile machine” in the TCPA to exclude online fax services. Following Ninth Circuit cases holding that FCC final orders are reviewable exclusively in the courts of appeals under the Hobbs Act, the district court held that the FCC’s order was binding and granted summary judgment to McKesson on claims involving online fax services. The court then decertified the class, leaving McLaughlin with claims for only 12 faxes received on a traditional machine and damages of $6,000. The Ninth Circuit affirmed.

Question Presented:

Does the Hobbs Act require a federal district court to accept the FCC’s legal interpretation of the TCPA?

The Supreme Court’s Decision:

In a 6-3 decision, authored by Justice Kavanaugh (which was to be expected), but joined by Roberts, Thomas, Alito, Gorsuch, and Barrett, the Supreme Court reversed, holding that the Hobbs Act does not bind district courts in civil enforcement proceedings to the FCC’s interpretation of the TCPA. The Court distinguished statutes that expressly preclude, or expressly authorize, judicial review in subsequent enforcement proceedings from statutes that do neither, finding that the Hobbs Act did neither. The Court found that the proper default rule where judicial review is neither expressly precluded nor authorized is that “a district court must independently determine for itself whether the agency’s interpretation of a statute is correct.” The district court must “determine the meaning of the law under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation.” The Court found that the Administrative Procedure Act, 5 U. S. C. §703, which provides: “except to the extent that prior, adequate, and exclusive opportunity for judicial review is provided by law, agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement,” controls the outcome. It cautioned that when “Congress wants to bar a district court in an enforcement proceeding from reviewing an agency’s interpretation of a statute, Congress can and must say so.”

The McLaughlin decision was foretold by another recent Supreme Court decision. In Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the Court overruled a longstanding judicial policy of deference to administrative interpretations of statutes, rejecting the idea that the agencies’ specialized expertise warrants deference to their interpretation. In that case as well, the Court relied upon 5 U. S. C. §703 as the basis to refuse deference.

Implications for Clients:

This ruling is crucial for companies involved in outbound telephone calls, including telemarketing and automated communications. After McLaughlin and Loper Bright, district courts are now free to apply traditional statutory interpretation principles to re-examine prior FCC orders that have driven litigation against sellers and telemarketers. While nearly any FCC order is subject to challenge, a few issues stick out:

Whether DNC Rules Cover Cell Phones: In a 2003 order, the FCC found that the definition of “residential subscribers” includes cell phone subscribers. See e.g.Buxton v. Full Sail, LLC, No: 6:24-cv-747-JSS-DCI, 2024 WL 5057222 (M.D. Fla. Dec. 10, 2024) (citing In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 14014 (July 3, 2003)). The Supreme Court’s ruling will encourage defendants to revisit that ruling.

Whether Robocall and DNC Rules Cover Text Messages: The 2003 order also expanded the definition of “telephone call” to include text messages. Melito v. Experian Marketing Solutions, Inc.‎, ‎923 F.3d 85‎ (2d Cir. 2019). Earlier Supreme Court decisions questioned the FCC’s interpretation of “telephone call.” In a footnote in Facebook, Inc. v. Duguid, 592 U.S. 395 (2021), the Court explained that it was assuming, “without … resolving [the] issue,” that the TCPA “extends to sending text messages.” Following McLaughlin, a district court applying ordinary principles of statutory interpretation could hold that the TCPA does not apply to texting. The first text message was on December 3, 1992, after the TCPA was enacted. A court applying the plain, ordinary meaning of “telephone call or message” as it was understood in 1991 when the TCPA was enacted and text messaging did not exist could find that Congress could not have intended the TCPA to cover text messages.

Who “Makes” or “Initiates” a Call: In several orders, the FCC has addressed who is liable for making or initiating a telephone call. In 1992, the FCC concluded that liability exists if a defendant demonstrates “a high degree of involvement or actual notice of an illegal use and failure to take steps to prevent such transmissions.” In the Matter of Rules & Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C. Rcd. 8752, ¶ 54 (1992). In 2015, the FCC found that “one can violate the TCPA either by taking the steps necessary to physically place a telephone call, or by being so involved in the placing of a specific telephone call as to be deemed to have initiated it.” See Rules & Regs. Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7890 (2015). The Supreme Court’s ruling will encourage defendants to litigate issues surrounding who “makes” or “initiates” a telephone call.

Use of Artificial Intelligence: In a 2024 order, the FCC declared that the TCPA’s restrictions on the use of an “artificial or prerecorded voice,” encompass the use of artificial intelligence technologies that generate human voices. The FCC thus held that calls using artificial intelligence in that way “require the prior express consent of the called party to initiate such calls absent an emergency purpose or exemption.” Declaratory Ruling, In re Implications of Artificial Intelligence Technologies on Protecting Consumers from Unwanted Robocalls and Robotexts, FCC 24-17 (Feb. 8, 2024). Because the use of generated voices of real humans raises questions of whether those voices are “artificial” for purposes of the statute, the Supreme Court’s ruling foreshadows challenges to the FCC’s ruling.

Prior Express (Written) Consent: Perhaps nowhere will the impact of the Supreme Court’s McLaughlin decision be felt more than in the area of the definition of prior express consent and permission. The statutory text requires that a caller obtain “prior express consent” or “prior express invitation or permission” from a consumer. The FCC has repeatedly re-defined the meaning of that term to limit the ability of consumers to consent or give permission for marketing calls, and each of those limits can now be challenged in a district court.

First, in 2012, the FCC interpreted “prior express consent” for telemarketing calls to mean consent that is in writing, signed by the consumer. In re Rules and Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 27 FCC Rcd. 1830, 1831 (2012); 47 C.F.R. § 64.1200(a)(2), (3).

The FCC went further in 2023, issuing a new order prohibiting consumers from providing consent to more than one entity at a time. Second Report and Order, In re Targeting and Eliminating Unlawful Text Messages, 38 FCC Rcd. 12247, 12258–69 (2023).

This “one-to-one consent rule” was immediately challenged. In Insurance Marketing Coalition Ltd. v. FCC, 127 F.4th 303 (11th 2025), the court vacated the rule holding that the FCC exceeded its statutory authority. The court held that the plain and ordinary meaning of “express consent” only required that consent be “clearly and unmistakably stated.” The FCC’s interpretation of “express consent” as requiring one-to-one consent amounted to a requirement of “prior express consent” plus: “At bottom, the FCC has ‘decreed a duty [on lead generators] that the statute does not require and that the statute does not empower the FCC to impose.'” Id., at 317 (citation omitted). The Supreme Court’s new ruling allowing facial challenge to the FCC’s interpretations and regulation presents the opportunity to challenge the FCC’s other orders requiring prior express consent plus.

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The FCC has interpreted, and in many cases expanded, the text of the TCPA in regulations dozens of times in the 33 years since its enactment. These interpretations have limited the ability of consumers to give consent and provide permission to companies to make calls offering products and services consumers want and need, and have restricted companies’ ability to rely on consumers’ consent. Although the examples listed above stand out, every interpretation of the FCC is now subject to challenge in the wake of McLaughlin and Loper Bright.

On May 9, Governor Brian Kemp signed House Bill 586, revising the definition of “long-term note[s] secured by real estate” that are subject to the intangible recording tax. Under current law, long-term notes are considered any note in which part of the principal is due more than three years from the date of the note. Long-term notes are subject to the intangible recording tax, which is $1.50 for each $500, or fraction thereof, of the face value of the note. The tax remains capped at $25,000.

The enacted House Bill can be found here. The changes, which are effective July 1, 2025, will:

Amend the definition of “long-term note[s] secured by real estate” to any note where part of the principal is due more than 62 months (five years and two months) from the date of the note; and

Remove the definition of “short-term note[s] secured by real estate.”

As a result, more real estate loans will be considered short-term and exempt from the intangible recording tax. Take, for instance, a common structure of a construction loan, which is often three years with one or two 1-year extension options. If it was in the borrower’s discretion to extend (i.e., the borrower could elect to extend upon the satisfaction of certain conditions, even if there was some subjectivity in the lender’s determination of satisfaction of such conditions), those loans were considered long-term. Given the amendments, those notes would now be considered short-term even with the extension options.

In addition, the rules and regulations adopted by the Georgia Department of Revenue must be amended to reflect the changes to the statute. For instance, the rules and regulations utilize the term “short-term note” throughout, most notably in the definitions, refinancing, and combination instrument regulations. Either the definitions of “short-term note[s] secured by real estate” and related phrases will need to be updated to reflect any note whose whole principal is due within 62 months from the date of the note, or the definitions will need to be repealed and a practical inference made. Additionally, any language referencing a “three-year period” will need to be amended to reflect the new 62-month time frame.

Key Takeaway – Fewer loans will be subject to intangible recording tax in Georgia.

For questions related to Georgia’s Intangible Recording Tax, contact Shelli Willis or Robert Kennedy.

Daria Elwell, a 2025 summer associate with Troutman Pepper Locke who is not admitted to practice law in any jurisdiction, also contributed to this article.

For foreign private issuers registered with the U.S. Securities and Exchange Commission (SEC), there are several filing statuses that affect the content of various disclosures that must be made public. Foreign private issuers filing periodic reports with the SEC must at least annually assess their status to determine which SEC requirements are applicable to them. This alert explores these various SEC statuses as applicable to foreign private issuers.

Assessing Status as a Foreign Private Issuer

Foreign private issuers enjoy the benefits of significant disclosure accommodations under U.S. federal securities laws. The determination of whether an issuer satisfies the definition of “foreign private issuer” (FPI) must generally be made annually on the last business day of an issuer’s second fiscal quarter (the last business day in June for issuers with a December 31 fiscal year end). For more information on assessing FPI status, see our alert detailing how to perform this important assessment.

Qualifying as an Emerging Growth Company as an SEC Reporting Issuer

Scaled SEC disclosure accommodations are also available to U.S. reporting issuers that are emerging growth companies (EGCs). One of the most significant of these accommodations exempts EGCs from the requirement to provide the burdensome annual auditor attestation of the issuer’s management’s report on internal control over financial reporting under the Sarbanes-Oxley Act of 2002, as amended (SOX). In addition, EGCs may defer compliance with certain changes in accounting standards. FPIs are permitted to take advantage of the disclosure accommodations available to EGCs.

An issuer qualifies as an EGC if it has total annual gross revenues of less than US$1.235 billion (periodically adjusted for inflation) during its most recently completed fiscal year end, and as of December 8, 2011, had not sold common equity securities under a registration statement filed under the Securities Act of 1933, as amended (Securities Act). However, an issuer of equity securities cannot retain EGC status indefinitely. An issuer may retain EGC status for the first five years after completing its first U.S. equity offering, with the status being lost on the last day of the issuer’s fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective Securities Act registration statement. Additionally, EGC status will be retained until the earliest of (1) the last day of the fiscal year in which the issuer has annual gross revenues exceeding US$1.235 billion (periodically adjusted for inflation), (2) the date on which the issuer issues more than US$1 billion in nonconvertible debt securities during the previous three years, (3) the date on which the issuer becomes a “large accelerated filer” (see “Determining SEC Accelerated Filing Status” below for more details), and (4) the last day of the fiscal year after the fifth anniversary of the date of the first sale of common equity securities under an effective Securities Act registration statement. Once EGC status is lost, it cannot be regained while an issuer is an SEC reporting issuer.

Determining SEC Accelerated Filing Status

With certain limited exceptions, all SEC reporting issuers, including FPIs, have a filing status based on the size of an issuer’s public float.[1] These categories include non-accelerated filer, accelerated filer, and large accelerated filer. Upon their initial registration of securities with the SEC, all issuers are classified as non-accelerated filers, as a 12-month reporting history and at least one annual report is required to be an accelerated or large accelerated filer. After the first 12 months of reporting history and first annual report, an issuer must make its initial assessment as to its filing status.

The following table sets forth the relationship between filing status and an issuer’s public float:

Determining SEC Accelerated Filing Status (For issuers for whom the revenue tests for smaller reporting companies are unavailable.)
Status	Public Float
Non-accelerated filer	Less than US$75 million (an issuer that does not meet the definition of accelerated filer or large accelerated filer)
Accelerated filer	US$75 million or more, but less than US$700 million
Large accelerated filer	US$700 million or more

FPIs must make this assessment for the coming fiscal year based on the issuer’s public float as of the last business day of the most recently completed second fiscal quarter. For example, for fiscal year 2026, an issuer with a December 31 fiscal year end would determine its accelerated status based on its public float as of June 30, 2025, the last business day of the most recently completed second fiscal quarter.

For an FPI, the principal consequence of an issuer’s filing status is that non-accelerated filers are not required to provide the SOX-mandated annual auditor attestation on management’s report on the issuer’s internal control over financial reporting. An FPI that is an accelerated filer or a large accelerated filer must provide such disclosure.

Generally speaking, once an issuer determines its filing status, it will retain that status until it determines at a future status assessment that its public float meets the thresholds set out below.

Determining SEC Accelerated Status After Initial Assessment (For issuers for whom the revenue tests for smaller reporting companies are unavailable.)
Initial Assessment	Subsequent Public Float	Subsequent Status
Large accelerated filer	US$560 million or more	Large accelerated filer
	Less than US$560 million, but US$60 million or more	Accelerated filer
	Less than US$60 million	Non-accelerated filer
Accelerated filer	US$700 million or more	Large accelerated filer
	Less than US$700 million but US$60 million or more	Accelerated filer
	Less than US$60 million	Non-accelerated filer
Non-accelerated filer	US$700 million or more	Large accelerated filer
	Less than US$700 million, but US$75 million or more	Accelerated filer
	Less than US$75 million	Non-accelerated filer

Evaluating MJDS Eligibility

For Canadian issuers, another status to track is eligibility for the SEC’s multijurisdictional disclosure system (MJDS). The MJDS allows eligible Canadian issuers to register securities and make regular disclosures using materials mostly prepared according to Canadian requirements. Eligible issuers can use the Form F-10 securities registration statement and the Form 40-F annual report, both of which largely serve to “wrap” their Canadian disclosures under an SEC submission.

To be eligible to use the MJDS, an issuer must:

Be incorporated or organized under the laws of Canada or any Canadian province or territory;
Be a foreign private issuer;
Have been reporting for the preceding 12 months with Canadian securities regulatory authorities;
Be currently in compliance with its reporting obligations; and
Have an aggregate market value of the public float of its outstanding equity shares of at least US$75 million.

Eligibility to use the MJDS Forms F-10 and 40-F must be determined based on the public float in the issuer’s principal market[2] for such shares within 60 days prior to the date of the filing. That is, so long as the issuer’s public float is more than US$75 million within 60 days of the filing of the Form F-10 or Form 40-F, such forms may be used.

Conclusion

Should you require any assistance in assessing your SEC status under any of the rules applicable to foreign private issuers, please contact Thomas Rose, Shona Smith, or Nicole Edmonds.

[1] “Public float” means the aggregate worldwide market value of the issuer’s voting and non-voting common equity held by non-affiliates. An affiliate is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the issuer. In determining SEC accelerated filing status, “affiliates” typically includes an issuer’s executive officers, directors, and shareholders owning 10% or more of the issuer’s common equity. Public float is measured as of the last business day of the issuer’s most recently completed second fiscal quarter and computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by nonaffiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity.

[2] Determining “public float” for purposes of determining MJDS eligibility is different than for determining SEC accelerated filing status. For MJDS eligibility “public float” is the aggregate market value of the company’s shares, other than those shares held by anyone who beneficially owns, directly or indirectly, or exercises control or direction over, more than 10% of the issuer’s outstanding equity shares. The determination of an issuer’s affiliates shall be made as of the end of the issuer’s most recent fiscal year. The market value of the public float is computed by use of the price at which such shares were last sold, or the average of the bid and asked price of such shares, in the principal market for such shares as of any one date within 60 days prior to the filing date.

On June 23, the U.S. Department of Justice announced that Terren Scott Peizer, founder of Ontrak Inc., a Miami-based publicly traded health care company, has been sentenced to three and one half years in prison by a California federal judge. This conviction is notable for its focus on the misuse of 10b5-1 trading plans, which are designed to allow corporate insiders to schedule stock transactions in advance, ensuring that decisions are not influenced by undisclosed material information. Alongside the prison sentence, Peizer has been ordered to pay a $5.25 million fine and forfeit over $12.7 million in gains deemed illicit.

Background

The case against Peizer is unique due to its focus on his 10b5-1 trading plans, plans that are commonly employed by executives to manage stock transactions with transparency intended to protect against insider trading accusations. Peizer’s conviction stems from allegations that he exploited the rules by entering into plans at a time when he possessed material non-pubic information about Ontrak’s business dealings, particularly its troubled relationship with its major client.

Specifically, in May 2021, Peizer entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the client was deteriorating. In August 2021, Peizer entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator confirmed that the contract with the client would likely be terminated. The indictment alleged that, in establishing his 10b5-1 plans, Peizer refused to engage in any “cooling-off” period (which was not required under the rule at the time but is required now), despite warnings from two brokers, and began selling shares of Ontrak on the next trading day after establishing each plan. On August 19, 2021, six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the client had terminated its contract, and Ontrak’s stock price declined by more than 44%.

Peizer’s counsel countered that Peizer could not have committed insider trading because he fully disclosed his trading plans to Ontrak, and the management team, including the insider trading compliance officer, approved of his plans before he traded.

Court’s Decision on Gain Calculation

Judge Dale Fischer determined that the appropriate measure of Peizer’s gain is the total difference between the amount received from the share sales and the residual value of the shares post-revelation. This decision aligns with the Eighth Circuit’s approach, emphasizing that Peizer’s illegal trades allowed him to avoid losses that he would have otherwise incurred. This method assumes that, absent the illegal trades, the defendant would have held the shares through the period of loss.

Appeal

The same day as his sentencing, Peizer filed an appeal.

Takeaways

10b5-1 Plan Requirements: This case serves as a timely reminder for corporate insiders and those charged with ensuring compliance about the strict requirements involved in 10b5-1 trading plans. Ensuring compliance with these requirements is crucial to avoid legal pitfalls when 10b5-1 plans are being relied on.

Scrutiny of Plan Intentions: When approving 10b5-1 sales plans, it may be beneficial to inquire about the reasons for entering into the plan. This proactive approach can help identify potentially problematic plans and ensure they are not being used to circumvent insider trading regulations.

The Real Issue: While the focus on 10b5-1 plans makes this case significant, it also can be treated as a straightforward insider trading case rather than a broader indictment of 10b5-1 plans themselves. That is because adoption of the first 10b5-1 plan was essentially irrelevant given the trading the next day and this pattern carried forward to the second plan and sales under it before Ontrak announced its bad news. The question then becomes whether Peizer had material nonpublic information when he sold his shares since the information base was the same when he adopted the 10b5-1 plans and then ostensibly sold under them.

Lessons for Inside Counsel and Others Responsible for Compliance: Inside counsel, compliance officers and others charged with ensuring compliance should take the lessons from this case to heart. If 10b5-1 plans are to be relied upon to protect subsequent sales from charges of insider trading, their requirements, mostly the importance of the absence of material nonpublic information at the time of their adoption and their being adopted in good faith, must be strictly complied with. That is why 10b5-1 plans are best adopted during trading window periods. When trading by insiders is taking place without a 10b5-1 plan, it continues to be important to ensure the absence of material nonpublic information.

Assessing Status as a Foreign Private Issuer

Qualifying as an Emerging Growth Company as an SEC Reporting Issuer

Determining SEC Accelerated Filing Status

The following table sets forth the relationship between filing status and an issuer’s public float:

Determining SEC Accelerated Filing Status (For issuers for whom the revenue tests for smaller reporting companies are unavailable.)
Status	Public Float
Non-accelerated filer	Less than US$75 million (an issuer that does not meet the definition of accelerated filer or large accelerated filer)
Accelerated filer	US$75 million or more, but less than US$700 million
Large accelerated filer	US$700 million or more

Generally speaking, once an issuer determines its filing status, it will retain that status until it determines at a future status assessment that its public float meets the thresholds set out below.

Determining SEC Accelerated Status After Initial Assessment (For issuers for whom the revenue tests for smaller reporting companies are unavailable.)
Initial Assessment	Subsequent Public Float	Subsequent Status
Large accelerated filer	US$560 million or more	Large accelerated filer
	Less than US$560 million, but US$60 million or more	Accelerated filer
	Less than US$60 million	Non-accelerated filer
Accelerated filer	US$700 million or more	Large accelerated filer
	Less than US$700 million but US$60 million or more	Accelerated filer
	Less than US$60 million	Non-accelerated filer
Non-accelerated filer	US$700 million or more	Large accelerated filer
	Less than US$700 million, but US$75 million or more	Accelerated filer
	Less than US$75 million	Non-accelerated filer

Evaluating MJDS Eligibility

To be eligible to use the MJDS, an issuer must:

Be incorporated or organized under the laws of Canada or any Canadian province or territory;
Be a foreign private issuer;
Have been reporting for the preceding 12 months with Canadian securities regulatory authorities;
Be currently in compliance with its reporting obligations; and
Have an aggregate market value of the public float of its outstanding equity shares of at least US$75 million.

Conclusion

Should you require any assistance in assessing your SEC status under any of the rules applicable to foreign private issuers, please contact Thomas Rose, Shona Smith, or Nicole Edmonds.

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