The National Law Forum

Let’s Circle Back (and eFile) after the Holidays

The Consumer Product Safety Commission launched its eFiling Beta Pilot a little over a year ago. Non-pilot participants were invited to participate in voluntary eFiling last summer, and the CPSC extended this stage to October 10, as it continued to work on a revised rule. The CPSC had anticipated completing a final rulemaking by the end of its fiscal year, which would have meant a full system implementation around January 1, 2025 – but regardless of when the final rule is published, the CPSC has proposed that the requirements go in effect 120 days after publication in the Federal Register.

Notably, the National Association of Manufacturers submitted comments regarding the rulemaking, highlighting issues with the proposed rules, including the scope of the filing system, technical and financial burdens for implementing the system, and the feasibility of complying with the proposed 120-day effective date window. It remains to be seen whether the CPSC will take these comments into consideration when the staff releases the updated package in the coming weeks, with a commission vote expected before the end of the year.

The eFiling program is the CPSC’s initiative to enable importers of regulated consumer products to file certain data from Certificates of Conformity (COC) electronically with Customs and Border Protection (CBP).This is not merely emailing existing COCs to CPSC or CBP, but digitizing individual data elements of the COC either directly into CBP’s Automated Commercial Environment (ACE) or through CPSC’s Product Registry.

There are many misconceptions related to the new rule and eFiling process and CPSC has created a broad resource library to help importers of record, the parties ultimately responsible for eFiling, comply with the new requirements. Any product that requires a COC today (whether a General Certificate of Conformity or a Children’s Product Certificate) will require eFiling under the new rule. However, the CPSC intends to honor enforcement discretions applied to certain products before the implementation of the eFiling program.

Internal business conversations between import compliance personnel, customs teams, product compliance teams, and brokers to discuss digitizing COC data and developing methods to manage trade parties, such as implementing identification mechanisms within testing programs, should begin, if they haven’t already. The CPSC also has an eFiling newsletter that is published quarterly and is due for another installment in the next month.

Once the final rule is published, eFiling will be a mandatory. So, to ensure compliance, the seamless import of goods, fewer holds at port, fewer targeted shipments, and reduced costs – implicated parties should get familiar and quickly for this fast approaching requirement.

eFiling is a CPSC initiative under which importers of regulated consumer products will electronically file (eFile) data elements from a certificate of compliance with U.S. Customs and Border Protection (CBP), via a Partner Government Agency (PGA) Message Set.

www.cpsc.gov/…

IRS Announces 2025 Retirement Plan Limits

The Internal Revenue Service (“IRS”) has announced the following dollar limits applicable to tax-qualified plans for 2025:

The limit on the maximum amount of elective contributions that a person may make to a 401(k) plan, a 403(b) tax-sheltered annuity, or a 457(b) eligible deferred compensation plan increased from $23,000 to $23,500.
The limit on “catch-up contributions” to a 401(k) plan, a 403(b) tax-sheltered annuity, or a 457(b) eligible deferred compensation plan for persons age 50 and older is unchanged for 2025 at $7,500.
As a result of change made by SECURE 2.0, for 2025, employees aged 60, 61, 62, and 63 who participate in a 401(k) plan, a 403(b) tax-sheltered annuity, or a 457(b) eligible deferred compensation have a higher catch-up contribution limit, which for 2025 is $11,250 instead of $7,500.
The dollar limit on the maximum permissible allocation under 401(k) and other defined contribution plans is increased from $69,000 to $70,000.
The maximum annual benefit under a defined benefit plan is increased from $275,000 to $280,000.
The maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan will go from $345,000 to $350,000.
The dollar amount used to identify “highly compensated employees” is increased from $155,000 to $160,000.

Additional information regarding benefit plan dollar limits can be obtained in Notice 2024-80, 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living.

Office Politics: The Basics for Private Employers

In case you haven’t noticed the yard signs popping up like mushrooms, the constant barrage of television and radio advertisements, or the unsolicited text messages from unknown numbers, we are in the homestretch of election season. For those employers with questions on how to handle political speech in the workplace, especially during the last few days before (and hopefully not much beyond) Election Day, here is a refresher on the basics for private employers.

The First Amendment to the U.S. Constitution prevents the government from enacting laws to prohibit the free exercise of speech and assembly, among other liberties. It does not apply to private employers. Where there is no state action involved, there is no unfettered right to free speech in a private place of employment. Quite simply, a private employer can enact rules to keep political expression from its workplace. Some employers prohibit political speech in the workplace to avoid potential disruptions to business operations, customer relations, or employee morale.

If an employer adopts a policy concerning political expression and messaging, it must do so fairly and consistently, and it should be inclusive and consistent to avoid the perception of favoritism or discrimination. In other words, if an employer requires Meghan to remove her Kamala button, it should also direct Dennis not to wear his Trump t-shirt. Remote workers are still “in the workplace” when they participate in virtual meetings, so there are no separate rules for them.

When enacting rules about political expression and messaging in the workplace, private employers should of course remain aware of the National Labor Relations Act (NLRA), which applies to both union and non-union settings, and among other things protects employees’ ability to engage in concerted activity or to discuss the terms and conditions of their employment. Therefore, private employers must be mindful of a potential nexus or overlap between employees’ political speech and discussion of working conditions. Under the NLRA, for instance, employees may distribute information during non-working time about a candidate’s stance on a particular issue that may also constitute a complaint about the employees’ working conditions.

8 Things to Know About AFFF Lawsuits

Thousands of individual lawsuits have been consolidated into multidistrict litigation (MDL) against the corporations that make aqueous film forming foam (AFFF), a type of firefighting foam that was filled with per- and poly-fluoroalkyl substances (PFAS), synthetic chemicals that are now known to be dangerous to human health.

Here are 8 things that you should know about the AFFF firefighting foam lawsuits, according to mass tort lawyer Dr. Nick Oberheiden.

1. AFFF Caused Lots of Chemical Contamination

AFFF is one of the types of foam that firefighters use to put out flames. There are two classes of AFFF firefighting foam:

Class A, which is used for combustible fires, like for wood or paper
Class B, which is used for ignitable liquids like oil, gas, or jet fuel

Class A firefighting foams rely primarily on the water in the foam to put out the flames, though they are still substantially more effective than just using straight water. They have far fewer chemicals in them and are used more often than Class B foams.

Of Class B foams, there are two types:

Foams that have fluorine in them
Foams that do not have fluorine in them

Both foams work the same basic way: By blanketing flammable liquids, they prevent the fuel from catching fire and extinguish any lit fuels by suffocating the flames of the oxygen that they need in order to keep burning. This works far better than water for these types of fires, as the flaming liquids are lighter than water and would float on its surface and continue to burn.

AFFF, however, is a fluorinated type of foam. That fluorine comes in the form of a PFAS compound. There are hundreds of types of these compounds, but they are all based on one of the strongest chemical bonds in organic chemistry; the one between fluorine and carbon.

2. PFAS Chemicals are Everywhere

While PFAS chemicals have been used in firefighting foam since the 1970s, when the U.S. Navy worked in collaboration with the giant chemical corporation 3M to produce a foam that could quickly put out fires on vessels, PFAS compounds have been used in a wide variety of other capacities since the 1940s. A very versatile chemical compound, PFAS chemicals were used to:

Prevent or remove stains
Suppress or resist heat
Waterproof materials or make them water resistant
Contain grease or oil

As a result, PFAS chemicals have been added to a huge array of consumer products that span nearly every industry, including:

Food packaging and wrapping
Pizza boxes
Raincoats
Water resistant clothing and shoes
Non-stick cookware
Carpeting
Paint
Wood stain, varnish, and lacquer

In recent decades, though, researchers have noticed that the sheer ubiquity of these chemicals could pose a threat: The carbon-fluorine bond that these synthetic compounds are based on does not break down naturally, leading to PFAS being dubbed “forever chemicals.” Every piece of PFAS that is produced will continue to be a PFAS until something is done to break it down artificially, like putting the chemical into water and then superheating the water well past its boiling point.

3. PFAS Chemicals are Dangerous

It was not until relatively recently that the public learned two things about these PFAS chemicals:

They had contaminated soil and groundwater across the country, and
They were connected to numerous different medical conditions, including several types of cancers.

The strong chemical bond between carbon and fluorine that was fundamental to PFAS meant that, as it was used or disposed of, it would not break down. Instead, PFAS chemicals would just build up in the soil where they were dumped or would contaminate the groundwater in that soil. Eventually, PFAS chemicals found their way into drinking water and water for crops and animals. From there, it got into the food system.

It was not until the 2000s that this became apparent to the public. By then, there had been nearly 60 years of PFAS buildup.

Around this time, medical researchers also discovered that exposure to PFAS chemicals could lead to PFAS contamination in the bloodstream, which could cause a host of serious medical conditions. While research is still being done to find out what, exactly, PFAS chemicals does in the human body and which medical conditions it can cause, PFAS contamination has been linked to increased risks for:

Pregnancy issues, including:
- Fetal death
- Birth deformities
- Hypertension
- Preeclampsia
- Low birth weight
- Developmental delays in young children
Liver damage
Liver cancer
Testicular cancer
Thyroid cancer
Kidney cancer
Prostate cancer
Fertility problems
A dysfunctional immune system, including decreased effectiveness of vaccines
Hormonal imbalances
Obesity
High cholesterol

These are some serious medical conditions that could end up being fatal. Anyone who was exposed to PFAS chemicals, including those in AFFF, are at risk of developing them and can talk to an AFFF lawyer about filing an AFFF firefighting foam lawsuit.

4. These Cases Involve Yet Another Corporate Cover-Up

As lawsuits over PFAS exposure started to get filed in the 2000s, it quickly became clear that the large corporations who had filled our world with PFAS-heavy products had long known the risks associated with them.

PFAS manufacturer DuPont, one of the largest chemical producers on the planet, instructed its workers to only handle PFAS chemicals with extreme care as early as 1961. PFAS manufacturer 3M had discovered that the company’s PFAS chemicals were inside fish that swam in the water near one of its plants in the 1970s. In the 1980s, DuPont suddenly moved all of its female employees out of the production facility that handled PFAS chemicals – several female DuPont employees in the facility had given birth to children with serious deformities.

In spite of these warning signs, these major corporations continued to dispose of PFAS materials however they wanted to – whether that meant dumping it into the water, burying it in the ground, or burning it into the air. They also continued making new products with PFAS chemicals in them, including AFFF firefighting foam in the 1970s, which was then used by military and civilian firefighters both to put out real fuel fires and to train in putting them out. This continued for three decades, with firefighters pumping PFAS-heavy foam onto airport tarmacs and training areas on military bases across the country, deeply contaminating the soil and nearby waterways and exposing the firefighters to dangerous amounts of PFAS chemicals.

The corporate cover-up would have continued, if it were not for two things. First, in 1998, the U.S. Environmental Protection Agency (EPA) learning of an internal study at one of the major PFAS manufacturers that had found that the offspring of pregnant lab rats who had been exposed to PFAS chemicals were almost guaranteed to die within days. Second, the first class action against the PFAS manufacturer Chemours reached a temporary settlement for $71 million and funding for the C8 Science Panel to research the dangers posed by PFAS chemicals. When the Panel started to publish its findings, Chemours quickly settled the case permanently for $671 million.

5. Other PFAS Lawsuits Have Recovered Billions, and That is Just for Clean Up

Since that first class action settled, many, many more lawsuits have been filed over PFAS contamination. These lawsuits have targeted the major corporations that have manufactured PFAS products, including:

3M
DuPont
Chemours
BAFS

All told, these MDLs and class actions have settled for over $11 billion. There are two things about these PFAS lawsuits are important to know:

They are confined to compensating for cleanup and decontamination costs, and
They apply to general PFAS products, not specifically to AFFF.

This first point is crucial. The plaintiffs in these huge lawsuits have been water districts that have demanded compensation for the costs of upgrading their filtration equipment and the decontamination of their water and soil. None of the $11 billion is earmarked for the inevitable medical conditions that all of that prior PFAS contamination will cause.

6. AFFF Firefighting Foam: Class Action or MDL? AFFF Lawsuits the First to Allege Personal Injuries and Losses

Now, though, an AFFF firefighting foam MDL includes personal injury claims for medical and financial losses by victims of AFFF exposure for the first time. So you have time to file an AFFF lawsuit and join the MDL.

MDL No. 2873 consolidated hundreds of these AFFF firefighting foam cases in the U.S. District Court for South Carolina in January, 2019. This MDL covers individual victims who have suffered from one of the medical conditions associated with PFAS exposure, who need medical monitoring after being exposed to the chemicals, or who have suffered a financial loss for the diminution in the value of their property due to PFAS contamination. The cases are limited to PFAS exposure from contaminated groundwater near military bases, airports, and other industrial sites due to the use of AFFF that contain either of the two main types of PFAS chemicals used in AFFF:

Perfluorooctanoic acid (PFOA)
Perfluorooctane sulfonate (PFOS)

When it was first consolidated into an MDL, there were around 500 cases. Since then, it has exploded to over 9,000 claims by July, 2024, with much of the growth coming in recent months.

7. Status and Future of the AFFF MDL

MDLs like this one have become the preferred way to handle mass tort situations: Cases where the misconduct of one or a small handful of companies have led to hundreds or thousands of people suffering in similar or identical ways. By consolidating all of the cases together for pre-trial procedures, like the gathering of evidence and summary judgment motions, the cases can move forward far more efficiently than if they were all on their own.

Even though the MDL was formed over two years ago now, the AFFF litigation is still in its early stages. The defendant corporations, all of whom manufactured and sold AFFF firefighting foams, will advance numerous legal defenses to avoid accountability for their conduct or to at least mitigate the damage of a judgment or the amount of a settlement. Some of the defenses that we will likely hear are:

The medical condition a particular person suffered was caused by something else
Some other AFFF manufacturer was responsible for a particular area of contamination
Plaintiffs waited too long to file their claims and the statute of limitations has expired
The company’s version of AFFF has less PFAS chemicals in it than others

In the meantime, a growing body of medical literature is connecting PFAS exposure and contamination to serious medical issues. We may even see new medical conditions getting linked to AFFF and the toxic chemicals in it.

As evidence is gathered, settlement talks will begin. If these prove to be fruitless, the court will schedule bellwether trials. These are individual cases that are representative of the rest of the cases in the MDL that are brought through a jury trial. The outcome of those trials are then used to inform further settlement discussions, which nearly always resolve the MDL outside of the courtroom.

8. How This Will Likely End

PFAS lawsuits have been equated to the Big Tobacco Settlement, when cigarette companies settled a class action against them for huge sums. In both cases, the large corporations knew that the products that they were selling were likely to cause life-threatening medical conditions, but continued to sell them and took affirmative actions to cover up evidence that there was any risk.

In the end, though, the most important factor will be the solvency of the defendant corporations that make AFFF. Some of them are substantially larger than others and will be better able to pay the huge settlements that we are likely to see. According to mass tort lawyer Dr. Nick Oberheiden, founding partner of the national law firm Oberheiden P.C. and leading attorney on AFFF cases, “As evidence is gathered, it will become more and more clear what the defendant corporations owe. If they are not able to pay it, they are more likely to extend this MDL to the bellwether trial stage in a risky attempt to avoid settling and try to beat it, altogether. Another option that they would have in this situation is to file for bankruptcy and create a victim’s trust fund, much like asbestos companies did in order to resolve the class action against them for causing mesothelioma.”

PRIVACY ON ICE: A Chilling Look at Third-Party Data Risks for Companies

An intelligent lawyer could tackle a problem and figure out a solution. But a brilliant lawyer would figure out how to prevent the problem to begin with. That’s precisely what we do here at Troutman Amin. So here is the latest scoop to keep you cool. A recent case in the United States District Court for the Northern District of California, Smith v. Yeti Coolers, L.L.C., No. 24-cv-01703-RFL, 2024 U.S. Dist. LEXIS 194481 (N.D. Cal. Oct. 21, 2024), addresses complex issues surrounding online privacy and the liability of companies who enable third parties to collect and use consumer data without proper disclosures or consent.

Here, Plaintiff alleged that Yeti Coolers (“Yeti”) used a third-party payment processor, Adyen, that collected customers’ personal and financial information during transactions on Yeti’s website. Plaintiff claimed Adyen then stored this data and used it for its own commercial purposes, like marketing fraud prevention services to merchants, without customers’ knowledge or consent. Alarm bells should be sounding off in your head—this could signal a concerning trend in data practices.

Plaintiff sued Yeti under the California Invasion of Privacy Act (“CIPA”) for violating California Penal Code Sections 631(a) (wiretapping) and 632 (recording confidential communications). Plaintiff also brought a claim under the California Constitution for invasion of privacy. The key question here was whether Yeti could be held derivatively liable for Adyen’s alleged wrongful conduct.

So, let’s break this down step by step.

Under the alleged CIPA Section 631(a) violation, the court found that Plaintiff plausibly alleged Adyen violated this Section by collecting customer data as a third-party eavesdropper without proper consent. In analyzing whether Yeti’s Privacy Policy and Terms of Use constituted enforceable agreements, it applied the legal frameworks for “clickwrap” and “browsewrap” agreements.

Luckily, my Contracts professor during law school here in Florida was remarkable, Todd J. Clark, now the Dean of Widner University Delaware Law School. For those who snoozed out during Contracts class during law school, here is a refresher:

Clickwrap agreements present the website’s terms to the user and require the user to affirmatively click an “I agree” button to proceed. Browsewrap agreements simply post the terms via a hyperlink at the bottom of the webpage. For either type of agreement to be enforceable, the Court explained that a website must provide 1) reasonably conspicuous notice of the terms and 2) require some action unambiguously manifesting assent. See Oberstein v. Live Nation Ent., Inc., 60 F.4th 505, 515 (9th Cir. 2023).

The Court held that while Yeti’s pop-up banner and policy links were conspicuous, they did not create an enforceable clickwrap agreement because “Defendant’s pop-up banner does not require individuals to click an “I agree” button, nor does it include any language to imply that by proceeding to use the website, users reasonably consent to Defendant’s terms and conditions of use.” See Smith, 2024 U.S. Dist. LEXIS 194481, at *8. The Court also found no enforceable browsewrap agreement was formed because although the policies were conspicuously available, “Defendant’s website does not require additional action by users to demonstrate assent and does not conspicuously notify them that continuing to use to website constitutes assent to the Privacy Policy and Terms of Use.” Id. at *9.

What is more, the Court relied on Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1179 (9th Cir. 2014), which held that “where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.” Here, the Court found the pop-up banner and link on Yeti’s homepage presented the same situation as in Nguyen and thus did not create an enforceable browsewrap agreement.

Thus, the Court dismissed the Section 631(a) claim due to insufficient allegations that Yeti was aware of Adyen’s alleged violations.

However, the Court held that to establish Yeti’s derivative liability for “aiding” Adyen under Section 631(a), Plaintiff had to allege facts showing Yeti acted with both knowledge of Adyen’s unlawful conduct and the intent or purpose to assist it. It found Plaintiff’s allegations that Yeti was “aware of the purposes for which Adyen collects consumers’ sensitive information because Defendant is knowledgeable of and benefitting from Adyen’s fraud prevention services” and “assists Adyen in intercepting and indefinitely storing this sensitive information” were too conclusory. Smith, 2024 U.S. Dist. LEXIS 194481, at *13. It reasoned: “Without further information, the Court cannot plausibly infer from Defendant’s use of Adyen’s fraud prevention services alone that Defendant knew that Adyen’s services were based on its allegedly illegal interception and storing of financial information, collected during Adyen’s online processing of customers’ purchases.” Id.

Next, the Court similarly found that Plaintiff plausibly alleged Adyen recorded a confidential communication without consent in violation of CIPA Section 632. A communication is confidential under this section if a party “has an objectively reasonable expectation that the conversation is not being overheard or recorded.” Flanagan v. Flanagan, 27 Cal. 4th 766, 776-77 (2002). It explained that “[w]hether a party has a reasonable expectation of privacy is a context-specific inquiry that should not be adjudicated as a matter of law unless the undisputed material facts show no reasonable expectation of privacy.” Smith, 2024 U.S. Dist. LEXIS 194481, at *18-19. At the pleading stage, the Court found Plaintiff’s allegation that she reasonably expected her sensitive financial information would remain private was sufficient.

However, as with the Section 631(a) claim, the Court held that Plaintiff did not plead facts establishing Yeti’s derivative liability under the standard for aiding and abetting liability. Under Saunders v. Superior Court, 27 Cal. App. 4th 832, 846 (1994), the Court explained a defendant is liable if they a) know the other’s conduct is wrongful and substantially assist them or b) substantially assist the other in accomplishing a tortious result and the defendant’s own conduct separately breached a duty to the plaintiff. The Court found that the Complaint lacked sufficient non-conclusory allegations that Yeti knew or intended to assist Adyen’s alleged violation. See Smith, 2024 U.S. Dist. LEXIS 194481, at *16.

Lastly, the Court analyzed Plaintiff’s invasion of privacy claim under the California Constitution using the framework from Hill v. Nat’l Coll. Athletic Ass’n, 7 Cal. 4th 1, 35-37 (1994). For a valid invasion of privacy claim, Plaintiff had to show 1) a legally protected privacy interest, 2) a reasonable expectation of privacy under the circumstances, and 3) a serious invasion of privacy constituting “an egregious breach of the social norms.” Id.

The Court found Plaintiff had a protected informational privacy interest in her personal and financial data, as “individual[s] ha[ve] a legally protected privacy interest in ‘precluding the dissemination or misuse of sensitive and confidential information.”‘ Smith, 2024 U.S. Dist. LEXIS 194481, at *17. It also found Plaintiff plausibly alleged a reasonable expectation of privacy at this stage given the sensitivity of financial data, even if “voluntarily disclosed during the course of ordinary online commercial activity,” as this presents “precisely the type of fact-specific inquiry that cannot be decided on the pleadings.” Id. at *19-20.

Conversely, the Court found Plaintiff did not allege facts showing Yeti’s conduct was “an egregious breach of the social norms” rising to the level of a serious invasion of privacy, which requires more than “routine commercial behavior.” Id. at *21. The Court explained that while Yeti’s simple use of Adyen for payment processing cannot amount to a serious invasion of privacy, “if Defendant was aware of Adyen’s usage of the personal information for additional purposes, this may present a plausible allegation that Defendant’s conduct was sufficiently egregious to survive a Motion to Dismiss.” Id. However, absent such allegations about Yeti’s knowledge, this claim failed.

In the end, the Court dismissed Plaintiff’s Complaint but granted leave to amend to correct the deficiencies, so this case may not be over. The Court’s grant of “leave to amend” signals that if Plaintiff can sufficiently allege Yeti’s knowledge of or intent to facilitate Adyen’s use of customer data, these claims could proceed. As companies increasingly rely on third parties to handle customer data, we will likely see more litigation in this area, testing the boundaries of corporate liability for data privacy violations.

So, what is the takeaway? As a brilliant lawyer, your company’s goal should be to prevent privacy pitfalls before they snowball into costly litigation. Key things to keep in mind are 1) ensure your privacy policies and terms of use are properly structured as enforceable clickwrap or browsewrap agreements, with conspicuous notice and clear assent mechanisms; 2) conduct thorough due diligence on third-party service providers’ data practices and contractual protections; 3) implement transparent data collection and sharing disclosures for informed customer consent; and 4) stay abreast of evolving privacy laws.

In essence, taking these proactive steps can help mitigate the risks of derivative liability for third-party misconduct and, most importantly, foster trust with your customers.

Lawsuit Challenges CFPB’s ‘Buy Now, Pay Later’ Rule

On Oct. 18, 2024, fintech trade group Financial Technology Association (FTA) filed a lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) final interpretative rule on “Buy Now, Pay Later” (BNPL) products. Released in May 2024, the CFPB’s interpretative rule classifies BNPL products as “credit cards” and their providers as “card issuers” and “creditors” for purposes of the Truth in Lending Act (TILA) and Regulation Z.

The FTA filed its lawsuit challenging the CFPB’s interpretative rule in the U.S. District Court for the District of Columbia. The FTA alleges that the CFPB violated the Administrative Procedure Act’s (APA) notice-and-comment requirements by imposing new obligations on BNPL providers under the label of an “interpretive rule.” The FTA also alleges that the CFPB violated the APA’s requirement that agencies act within their statutory authority by ignoring TILA’s effective-date requirement for new disclosure requirements and imposing obligations beyond those permitted by TILA. The FTA also contends that the CFPB’s interpretive rule is arbitrary and capricious because it is “a poor fit for BNPL products,” grants “insufficient time for BNPL providers to come into compliance with the new obligations” imposed by the rule, and neglects “the serious reliance interests that [the CFPB’s] prior policy on BNPL products engendered.”

In a press release announcing its lawsuit, the FTA said the BNPL industry would welcome regulations that fit the unique characteristics of BNPL products, but that the CFPB’s interpretive rule is a poor fit that risks creating confusion for consumers. “Unfortunately, the CFPB’s rushed interpretive rule falls short on multiple counts, oversteps legal bounds, and risks creating confusion for consumers,” FTA President and CEO Penny Lee said. “The CFPB is seeking to fundamentally change the regulatory treatment of pay-in-four BNPL products without adhering to required rulemaking procedures, in excess of its statutory authority, and in an unreasonable manner.”

The FTA’s pending lawsuit notwithstanding, BNPL providers may wish to consult with legal counsel regarding compliance with the CFPB’s interpretive rule. Retailers marketing BNPL products should also consider working with legal counsel to implement third-party vendor oversight policies to enhance BNPL-partner compliance with the rule.

2025 Inflation-Adjusted Plan Limits

On Nov. 1, 2024, the IRS published its annual cost of living adjustments for various retirement plan limits. These increases are more modest than recent years, a reflection that inflation is slowing. The updated key retirement plan limits include the following items:

2025 Limit	2024 Limit
Annual Compensation Limit	$350,000	$345,000
Elective Deferral Limit	$23,500	$23,000
Standard Age 50 Catch-Up Contribution Limit	$7,500	$7,500
Age 60-63 Special Catch-Up Contribution Limit*	$11,250	N/A
DC Maximum Contribution Limit	$70,000	$69,000
DB Maximum Benefit Limit	$280,000	$275,000
HCE Threshold	$160,000	$155,000

*Note, this is a new provision under the SECURE 2.0 Act.

The IRS previously released the updated 2025 limits applicable to certain health and welfare plans, including the following key limits:

2025 Limit	2024 Limit
Health FSA – Maximum contributions	$3,300	$3,200
Health FSA – Maximum carryover of unused amounts (optional plan provision)	$660	$640
HSA – maximum contributions	$4,300 (self-only) $8,550 (family)	$4,150 (self-only) $8,300 (family)
HDHP – Minimum Deductible	$1,650 (self-only) $3,300 (family)	$1,600 (self-only) $3,200 (family)
HDHP – Maximum Out of Pocket	$8,300 (self-only) $16,600 (family)	$8,050 (self-only) $16,100 (family)

We Had an Agreement as to Value, But Ignored It. Now What?

Quite often a shareholders’ agreement or operating agreement will contain a provision establishing the company’s value in the event of a buyout of one of the owners. Sometimes the agreement requires a valuation to be performed at the end of every year – possibly by the company accountant – and may even set forth a formula that is to be followed annually, or at least utilized as a guideline. Many small companies, of course, are run in such a way that it is not surprising in the slightest that this yearly valuation is often not done. In fact, I can count on one hand the number of companies that I have seen actually follow this mandate to value itself yearly.

So, what happens when there is now conflict among the owners? One of them wants to leave, and the other owners would rather let him go than get involved in costly business divorce litigation. Sometimes the only dispute in such a case comes down to the dollars, not whether there will be a departure. Likewise, the majority owners may want a minority owner to leave who also doesn’t have the stomach for a fight. The shareholder’s agreement may have a formula set forth – from 20 years ago – as to how to value the company. But the called-for annual valuation was never done. Or, it was done for 3 years, and then it stopped. How does the company get valued now?

There is no single right answer to this question, unfortunately. What a court might do is likely going to be very fact dependent. If all the owners were aware of the obligation to value the company annually and they all ignored it, a judge may deem the requirement to have been effectively “written out” of the agreement. But what if you were a minority owner who had no ability to control whether the valuation was done and you complained in the early years about this provision being ignored? You certainly have a better argument, but you still failed to do anything formal to assert your right to be governed by such a valuation.

It also depends on the circumstances of the current buyout. If the departure is voluntary, then of course the parties are free to agree to have the valuation done now that was supposed to have occurred for the past 20 years. But if shareholder dispute litigation is in play, as a voluntary buyout seems not a viable option, then one can argue that the formula should not apply at all. If one is arguing for a buyout under the shareholder oppression statute, one may argue that “fair value” – the value set forth in the New Jersey statute that governs business divorce litigation – should apply. This is an especially powerful argument if the agreement contains a formula that does not yield a value as high as fair value. Why should majority shareholders be permitted to act improperly toward the minority and then be rewarded with a discounted value?

But, as with many things, there is no clear-cut answer that applies in all circumstances. At least one judge in the past has determined that the parties’ agreement set forth the parties’ reasonable expectation as to value and applied it in an oppression setting. So, while there is no iron-clad answer, be sure you are represented by an experienced shareholder dispute attorney who understands the issues and can make the best argument for value possible for you.

Affordable Care Act Proposed Rule Would Broaden Access to Over-the-Counter Contraception Without Cost Sharing

Employer-sponsored health plans would be required to cover over-the-counter contraception, including condoms and emergency contraception, without a prescription and without cost sharing under newly proposed Affordable Care Act (ACA) regulations

Quick Hits

Proposed rules issued by the DOL, HHS, and Treasury are designed to increase coverage for over-the-counter contraceptives, such as condoms, spermicides, and emergency contraception, without a prescription.
If finalized, the proposed rules would be the first time that male contraceptives will be covered under the ACA preventive care requirements.
The public has until December 27, 2024, to submit comments on the proposed rules.

Fully insured and self-insured health plans would have to cover every Food and Drug Administration (FDA)-approved contraceptive drug or drug-led combination product without cost sharing, unless the plan or insurer covers a therapeutic equivalent without cost sharing, under rules proposed by the U.S. Departments of Health and Human Services, Labor, and Treasury.

Employer-sponsored health plans and insurers also would have to tell participants that over-the-counter contraception without a prescription is covered at no cost, under the proposed rules published October 28, 2024, in the Federal Register.

The ACA requires most group health plans to cover preventive care at no cost to patients. Preventive care under the ACA includes FDA-approved contraceptives for women, such as birth control pills, injectable contraceptives, contraceptive patches, implantable rods, intrauterine devices, diaphragms, sponges, vaginal rings, emergency contraception medication, and sterilization procedures for women. In 2022, the Health Resources and Services Administration (HRSA) issued updated guidelines that define which healthcare services are considered preventive for women.

Without a prescription, over-the-counter products were not included in the ACA’s coverage requirement. The proposed rule would change that.

In guidance issued earlier this year, the departments noted that they are still identifying plans that are out of compliance with the contraceptive care requirements. Employers that violate the ACA mandate can be fined $100 for each day in the noncompliance period for each affected employee. At first, the ACA granted exemptions to churches and other religious organizations that hold instilling religious values as their purpose and primarily employ people who share their religious beliefs. The criteria to qualify for an exemption were broadened later. Without an exemption, nongovernmental employers can use a self-certification form to instruct their health insurer to exclude contraceptive coverage from the group health plan and provide payments to patients for contraceptive services separate from the health plan.

In July 2020, the Supreme Court of the United States ruled that private employers with religious or moral objections can be exempt from the contraceptive mandate.

Seven states—California, Colorado, Maryland, New Jersey, New Mexico, New York, and Washington—already have laws requiring state-regulated health insurance policies to cover certain over-the-counter contraceptives without a prescription and without cost sharing.

Next Steps

Employers may want to review the coverage of contraceptives under their medical plans both to ensure that no improper restrictions are put on them currently and also to clarify how their coverage would need to expand if these proposed rules became final in a substantially similar form.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

Federal Contractors Beware – More Data Disclosures Coming!

On October 29, 2024, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a Freedom of Information Act (FOIA) notice, inviting federal contractors to respond to FOIA requests that the OFCCP received related to federal contractors’ 2021 Type 2 EEO-1 Consolidated Reports. These reports, required of federal contractors and subcontractors with at least 50 employees, contain data critical to the government’s diversity efforts consistent with anti-discrimination mandates under Title VII and Executive Order 11246. Contractors have previously relied on FOIA Exemption 4 to protect against disclosing sensitive commercial information that could impact competitive positioning, but in late December 2023 as previously reported here, a federal court ruling concluded that certain demographic data did not qualify as confidential under FOIA Exemption 4. That court decision may spur an increase in FOIA requests for EEO-1 reporting information.

Contractors who wish to object to the disclosure of their EEO-1 reporting information must do so via OFCCP’s online portal, email, or mail on or before December 9, 2024. Per the OFCCP’s notice, contractors can object to releasing their 2021 EEO-1 Type 2 data by providing evidence showing the data satisfies FOIA Exemption 4. To do this, contractors should:

Specifically identify the objectionable data;
Explain why this data is commercial or competitive to render it confidential;
Outline the processes the contractor has in place to safeguard the data;
Identify any prior assurances or expectations that the data would remain confidential; and
Detail the damage that would occur if the data were disclosed by conducting assessments to see how disclosure would impact business operations.

In addition to raising timely objections to disclosure of data, contractors should also implement clear policies to maintain a consistent approach to data confidentiality. Specifically, contractors should be thoughtful and consistent as to how they define confidential information and the protection measures they take related to such information.

FOIA requests and court decisions in this space will likely continue to make striking a balance between government transparency and protecting contractors’ confidential business information more difficult. To navigate these changes, federal contractors should remain vigilant by staying informed, preparing objections to FOIA requests, and consulting with legal counsel to ensure compliance with this evolving area of law.

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