On May 8, 2024, the National Labor Relations Board (“Board”) issued a decision reversing a 2021 decision the Board previously vacated after former Board Member William Emanuel, who participated in the ruling, was found to have broken ethics rules by failing to recuse himself from the case. In the decision, the Board held that George Washington University Hospital (“GW Hospital”) violated the National Labor Relations Act (the “Act”) by unilaterally withdrawing its recognition of a union and refusing to bargain in good faith. See The George Washington Univ. Hosp., L.P., 373 NLRB No. 55 (2024).

Continue Reading NLRB Finds GW Hospital Failed to Bargain in Good Faith in Reversal of Vacated Decision

On March 28, the FDIC released the spring edition of its consumer compliance supervisory highlights. The FDIC supervises approximately 3,000 state-chartered banks and thrifts that are not members of the Federal Reserve System. Most of these institutions are community banks that provide credit and services locally. Like the CFPB, the FDIC conducts supervisory activities, including examinations, to review institutions’ compliance management systems. Its examination focuses on identifying the greatest potential risk of harm to consumers, based on the business model and products offered by a particular institution. The FDIC’s report highlights consumer compliance issues identified by the agency’s examination of close to 900 institutions in 2023. While the entire report is worth a read, here are some key areas of focus:

Continue Reading Takeaways From the FDIC’s Spring 2024 Consumer Compliance Supervisory Highlights

In recent years, a substantial number of “Schedule A” trademark infringement cases have been filed in the Northern District of Illinois. In such a case, the trademark owner may file a trademark infringement complaint against a number of defendants, with the complaint identifying the defendants as “The Individuals, Corporations, Limited Liability Companies, Partnerships and Unincorporated Associations Identified on Schedule A hereto.” [See, e.g., Opulent Complaint

Continue Reading How to Recover Attorneys’ Fees in a Schedule A Trademark Case in the Northern District of Illinois

On May 6, 2024, the CFPB resolved an enforcement action against a group of Delaware student loan trusts and a loan servicer (found here and here) for their failures to adequately respond to borrowers’ requests for relief, including during the COVID-19 pandemic. When entered by the court, the stipulated final judgments will require defendants to pay almost $3 million in redress to borrowers, and pay a fine of $2.15 million.

Continue Reading CFPB Settles Action Against Student Loan Servicer and Securitization Trusts

On May 9, the CFPB issued a new report highlighting the issues consumers encounter with credit card rewards programs. The report was released in conjunction with a hearing co-hosted with the Department of Transportation and featured remarks from Director Chopra and Secretary of Transportation Pete Buttigieg, along with panelists from consumer groups, policy advocacy organizations, financial institutions, and airlines. Chopra, in particular, noted the lack of transparency in the rewards market and how many card issuers engage in bait-and-switch scams. As described in further detail in the report, the Bureau found the following issues with rewards programs;

Continue Reading CFPB Targets Credit Card Rewards Programs

In a much-anticipated move, sources recently reported that the Drug Enforcement Administration (“DEA”) will recommend rescheduling cannabis from a Schedule I substance to a Schedule III substance under the federal Controlled Substances Act.[1] This recommendation will likely be based on the Health and Human Services Report, which evaluated scientific evidence of cannabis use for medical purposes and determined that cannabis does have accepted medical value with a higher safety profile than Schedule II medications.[2] The DEA’s recommendation is also in line with President Biden’s directive for the Federal government to take steps to review how cannabis is presently scheduled under federal law.[3] In response to the DEA recommendation, the White House Office of Management and Budget will review the recommendation. If approved, there will be a public hearing allowing experts and the public to weigh in on rescheduling. Absent any major meritorious objections, cannabis will then be rescheduled from a Schedule I substance to a Schedule III substance.

Continue Reading Bridging the Gap: Cannabis Rescheduling to Align Policy with Research

Is your M&A target a manufacturing company with automated production, a consumer products business with online sales and marketing or an education company that creates content for students? The increasing use and development of artificial intelligence (“AI”) systems and products, particularly generative AI, has created risks for businesses using such tools. AI plays a role in many industries and businesses whose products and services are not themselves AI. In the context of a M&A transaction, it is important to identify and allocate responsibility for these risks. Risks of AI may include: infringement (including through use of training data as well as outputs), confidentiality, IP ownership and protection (including limits on protection of IP generated by AI), regulatory (e.g., privacy, recent AI related legislation), and other risks arising from use such as indemnity obligations or managing contractor use of AI.

Continue Reading M&A Transactions: Drafting AI Representations and Warranties for Non-AI Companies

California is among a handful of states that seeks to regulate the use of artificial intelligence (“AI”) in connection with utilization review in the managed care space. SB 1120, sponsored by the California Medical Association, would require algorithms, AI and other software tools used for utilization review to comply with specified requirements. We continue to keep up to date on AI related law, policy and guidance. The Sheppard Mullin Healthcare Team has written on AI related topics this year and those articles are listed here: i) AI Related Developments, ii) FTC’s 2024 PrivacyCon Part 1, and iii) FTC’s 2024 PrivacyCon Part
Continue Reading The Intersection of Artificial Intelligence and Utilization Review

California is among a handful of states that seeks to regulate the use of artificial intelligence (“AI”) in connection with utilization review in the managed care space. SB 1120, sponsored by the California Medical Association, would require algorithms, AI and other software tools used for utilization review to comply with specified requirements. We continue to keep up to date on AI related law, policy and guidance. The Sheppard Mullin Healthcare Team has written on AI related topics this year and those articles are listed here: i) AI Related Developments, ii) FTC’s 2024 PrivacyCon Part 1, and iii) FTC’s 2024 PrivacyCon Part 2. Also, our Artificial Intelligence Team’s blog can be found here. Experts report that anywhere from 50 to 75% of tasks associated with utilization review can be automated. AI might be excellent at handling routine authorizations and modernizing workflows, but there is a risk of over-automation. For example, population trends of medical necessity can miss unusual clinical presentations. SB 1120 seeks to address these concerns. 

Continue Reading The Intersection of Artificial Intelligence and Utilization Review

Recently, the Department of Health and Human Services Office of Inspector General (“OIG”) released Advisory Opinion (“Opinion”) 24-02 regarding patient assistance funds provided by a non-profit charitable organization (“Requestor”). This opinion marks the latest in a string of advisory opinions which have approved similar patient assistance programs (“PAPs”). As highlighted in previous advisory opinions, OIG reiterates the importance of the charity’s independence from pharmaceutical manufacturer influence.

Continue Reading OIG Issues Favorable Advisory Opinion Regarding Patient Assistance Funds

As we previewed last year regarding SB 184 and the establishment of the California Office of Health Care Affordability (OHCA), California now has taken a significant regulatory step aimed at restraining growth in health care costs. On April 24, 2024, OHCA’s board (the “Board”) voted to implement its long anticipated statewide health care cost target, beginning with a 3.5% cap on spending growth in 2025 and decreasing in the following years. As with OHCA’s cost and market impact review (CMIR) reporting regime,[1] this cap will apply to “health care entities,” which include providers such as hospitals, facilities, outpatient clinics, large physician groups and clinical laboratories, payors and fully integrated delivery systems.

Continue Reading California is Capping Health Care Cost Increases – Starting at 3.5% in 2025

On April 22, 2024, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule (CMS-2439-F), effective July 9, 2024, aimed at advancing healthcare access, quality of care, and health equity for Medicaid and Children’s Health Insurance Program (CHIP) managed care enrollees. Managed care serves as the predominant delivery system in these programs, where healthcare services are organized through networks of providers overseen by managed care organizations (MCOs). These organizations employ strategies such as utilization review and case management to manage costs and ensure quality care, with
Continue Reading CMS Issues Final Rule on Medicaid and CHIP Managed Care Access, Finance, and Quality

On April 26, 2024, Ctrl Alt Destroy, Inc. (“CAD”), a California Corporation and cannabis licensee filed a lawsuit against Nicole Elliott in her official capacity as Director of the State of California’s Department of Cannabis Control (“DCC”) and Rob Bonta in his official capacity as Attorney General of the State of California, seeking declaratory and injunctive relief alleging that California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) is unconstitutional under the Fifth and Fourteenth Amendments to the US Constitution and is preempted by the National Labor Relations Act (“NLRA”).

Continue Reading Cannabis Operator Challenges California State Statute and Regulations Requiring Labor Peace Agreements

On April 26, 2024, Ctrl Alt Destroy, Inc. (“CAD”), a California Corporation and cannabis licensee filed a lawsuit against Nicole Elliott in her official capacity as Director of the State of California’s Department of Cannabis Control (“DCC”) and Rob Bonta in his official capacity as Attorney General of the State of California, seeking declaratory and injunctive relief alleging that California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) is unconstitutional under the Fifth and Fourteenth Amendments to the US Constitution and is preempted by the National Labor Relations Act (“NLRA”).

Continue Reading Cannabis Operator Challenges California State Statute and Regulations Requiring Labor Peace Agreements

According to published reports, George Carlin’s estate settled right of publicity and copyright claims relating to an AI-scripted comedy special using a “sound-alike” of George Carlin which performed the generated script. The special – “I’m Glad I’m Dead” – sought to reflect how Carlin would have commented on current events since his death in 2008. While most of the settlement terms are confidential, it is significant as one of the first resolutions of a case involving these issues. According to plaintiff’s lawyer, the defendants agreed to permanently remove the comedy special and to never repost it on any platform. They also agreed not to use Mr. Carlin’s image, voice or likeness on any platform without approval from the estate. There is no indication of whether the settlement included monetary damages.

Continue Reading George Carlin Was Funny – Copying His Likeness AIn’t – Estate Settles AI-based Right of Publicity and Copyright Claims

The Federal Communications Commission (FCC) voted on April 25, 2024 to reinstate its net neutrality rules by reclassifying broadband internet access service (BIAS) as a “telecommunications service” under Title II of the Communications Act (Act). The FCC’s rules now afford stand-alone BIAS providers with the same statutory protections under Section 224 of the Act for accessing poles and other utility infrastructure that cable and telecommunications providers receive. This could be particularly important considering the anticipated deployments driven by the Broadband Equity And Deployment (“BEAD”) program and other subsidy programs.

Continue Reading With Net Neutrality Order, FCC Grants Broadband-Only ISPs New Pole Attachment Protections